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Here Comes Another Debt Ceiling Showdown

Will Obamacare be part of the standoff?

by
Bill Straub

Bio

September 7, 2013 - 12:05 am
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WASHINGTON – The showdown is coming sooner than expected.

Treasury Secretary Jacob Lew has officially notified congressional leaders that the federal government likely will reach the $16.7 trillion debt limit by mid-October, at which time U.S. will find itself unable to borrow the money needed to pay its debts unless Congress acts to raise the ceiling.

There was some hope that the anticipated debate over the debt limit, expected to prove difficult, could be delayed until November, especially since lawmakers aren’t scheduled to return to Washington from their August recess until Sept. 9 and must first consider a continuing resolution to fund government operations beyond Oct. 1 – providing little time to work out a deal.

In his notification letter dated Aug. 26, Lew told House Speaker John Boehner (R-Ohio) and Senate Democratic Leader Harry Reid, of Nevada, among others that failure to increase the government’s borrowing power “would cause irreparable harm to the American economy.”

“Protecting the full faith and credit of the United States is the responsibility of Congress because only Congress can extend the nation’s borrowing authority,” Lew wrote.

Speaking to members of the Commonwealth Club of California in Mountain View last month, Lew emphasized the importance of quick congressional action in addressing the debt limit question to avoid the economically harmful consequences of a U.S. default or threat of default. He also cautioned that tax revenues and expenditures are inherently unpredictable, rendering it difficult for Treasury to predict with any degree of precision when the government might run out of time.

“We cannot afford for Congress to wait until some unknowable last minute to resolve this matter on the eve of a deadline,” Lew said. “We cannot afford another unnecessary self-inflicted wound.”

If Congress fails to raise the debt ceiling in time, the federal government would hold only about $50 billion in cash to pay its bills on a daily basis. Lew noted that the debt limit has nothing to do with new federal spending.

“It has to do with spending that Congress has already approved and bills that have already been incurred,” he said. “Failing to raise the debt limit would not make these bills go away. It would, though, have disastrous effects for our nation.”

Raising the debt limit, once a formality, has been transformed in recent years into a battle royal, with Republicans insisting on deep spending cuts and other austerity measures in order to gain their support.

The situation is no different this go-round. Boehner has made it clear that GOP lawmakers, who control the House, expect deep spending cuts in exchange for raising the ceiling. Appearing at a fundraiser for Rep. Mike Simpson (R-Idaho) in Boise on Aug. 26, Boehner in fact said he anticipates “a whale of a fight” over any debt ceiling measure.

“I’ve made it clear that we’re not going to increase the debt limit without cuts and reforms that are greater than the increase in the debt limit,” Boehner said in remarks first reported by the Idaho Statesman. “The president doesn’t think this is fair, thinks I’m being difficult to deal with. But I’ll say this — it may be unfair but what I’m trying to do here is to leverage the political process to produce more change than what it would produce if left to its own devices.”

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Top Rated Comments   
I don't know how these monies will be spent or where, but I assume a lot will be going to maintain the normal functioning of many different government agencies and departments.

I suggest that any department that has broken the law, exceeded its mandate, lied under oath to Congress and the American people have its budget severely cut back or be un-funded. Savings galore!

Otherwise, we'd be bankrolling criminal activities and at least for regular citizens, that's a no-no though Congress has probably exempted itself from that crime.
45 weeks ago
45 weeks ago Link To Comment
All Comments   (16)
All Comments   (16)
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It's time to cut up the credit cards.

The U.S. Federal Government is addicted to spending money it doesn't have. They will not stop, unless pain is inflicted -- making it easier to not spend than to spend.

So, no, don't raise the debt limit. Not a billion, not a million, not a penny. Let them deal with the problem the way families across America have had to do, when the breadwinner was laid off, or when health insurance became unaffordable. If you can't incur more debt, and you've committed to doing so to meet existing expenses, then you must cut spending -- drastically -- to find the money you need.

As far as I'm concerned, we can start with a 5% cut off ALL government agencies, ALL departments. No exceptions granted for any reason whatsoever. If you can't cut personnel, find a way to pay for them with 5% less money. All legislators, in particular -- and all their staff -- should take an immediate 5% pay cut, and if any protest, their constituencies can be encouraged to hold a special election.

Any Federal department that simply can't survive on only 95% of the money they got last year should be eliminated. What essential jobs they did can then be done by someone else, someone more sensitive to the future of the American people.

Because far too many of us have had to cut a lot more than just 5%... and many have had to do it repeatedly.

Step one, Mr. President: remove hand from flame.
45 weeks ago
45 weeks ago Link To Comment
I don't know how these monies will be spent or where, but I assume a lot will be going to maintain the normal functioning of many different government agencies and departments.

I suggest that any department that has broken the law, exceeded its mandate, lied under oath to Congress and the American people have its budget severely cut back or be un-funded. Savings galore!

Otherwise, we'd be bankrolling criminal activities and at least for regular citizens, that's a no-no though Congress has probably exempted itself from that crime.
45 weeks ago
45 weeks ago Link To Comment
"The federal government actually hit the debt ceiling in May, but “extraordinary measures” taken by the Treasury Department have kept things running. That effort was aided when Fannie Mae and Freddie Mac, the government’s two secondary mortgage giants, came through with $60 billion as partial payment for bailout funds resulting from the subprime mortgage crisis of 2008."

Are Treasury's "extraordinary measures" printing more money, further devaluing our currency ?

And how many billions upon billions of taxpayer cash have Fannie and Freddie tossed down the drain over the long haul of their dubious lives ? Hell, Fannie CEO Franklin Raines' departing bonus alone would have helped at the Fannie and Freddie financial disasters, those federal lending agencies in very large part precipitating the '08 meltdown.

And we're supposed to be grateful for a measly 60 billion ?

Our currently Un-Great deliberative bodies, under the tutelage of the ethically challenged Harry Reid and the substantially addled Nancy Pelosi jammed the Un-Affordable care act down our throats over the objections of about 70% of the American population.

And now that same population is being begged to rally in support of de-funding of the thing ?

Gimmee a break.
45 weeks ago
45 weeks ago Link To Comment
Fannie and Freddie got a "...$188-billion taxpayer bailout during the financial crisis."

Recently, there was something in the news about additional monies thrown at those agencies to prop them up, to the tune of many billions.

Those kinds of facts put some $60 billion "payback" in perspective.
45 weeks ago
45 weeks ago Link To Comment
"Mr. President, I rise today to talk about America’s debt problem. The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.

[...]
Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘‘the buck stops here.’’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve."

Senator Barrack Hussein Obama, March 16, 2006.

This must be another one of those pesky red lines, right Mr. President?
45 weeks ago
45 weeks ago Link To Comment
there is no debt problem anyone notice that the debt clock hasn't moved in more than 30 days.

So just lie, say the debt is solved the media will report that as true, because B.O. said so and we can pass the debt onto our grand children and live happily ever after.

45 weeks ago
45 weeks ago Link To Comment
Stock up on aspirin. October is shaping up to be a headache of a month what with the kickoff of Un-Affordable Care, the Congressional P*ssing Match over a budget and let's not forget the sight of American foreign policy piling up on the rocks. Egads.
45 weeks ago
45 weeks ago Link To Comment
Having been successfully distracted by various squirrels in the last few months, I'm sorry to say that I don't know whether or not the House has passed a series of individual spending bills to fund the various parts of the government at appropriate levels for the coming year. If they have not, why not? Using continuing resolutions instead is dereliction of duty, in my view. If they have passed such spending bills, then let the Senate take them up one by one. If the Senate doesn't, or if the Senate does, and Obama chooses not to sign the bills, then, so sorry, the government will not be funded. Needless to say, funding for Obamacare should not be included in any of the bills.
45 weeks ago
45 weeks ago Link To Comment
As soon as I got to "deep spending cuts" I stopped reading.

www
45 weeks ago
45 weeks ago Link To Comment
White House Press Secretary Jay Carney said the administration’s position is “unequivocal — we will not negotiate with Republicans in Congress over Congress’s responsibility to pay the bills that Congress has racked up, period.”

Um, yeah...the Obama Admin had nothing to do with piling up all this debt. These clowns think the American people are even dumber than they are. And after 2012, who can blame them?
45 weeks ago
45 weeks ago Link To Comment
"And after 2012, who can blame them?"

Can't blame them. Carney and now serial state department teeny bopper spokes-chicks just bluff and dissemble their way through each successive débacle.

Just waiting it out, because the next débacle is right around the corner to distract attention.
45 weeks ago
45 weeks ago Link To Comment
"Treasury Secretary Jacob Lew... failure to increase the government’s borrowing power “would cause irreparable harm to the American economy.”

Blah blah blah.

Seems as much a yakker and idiotlogue as his predecessor, Turbo Tax Timmy.

It bothers no one (except me apparently) that Senator Obama voted a resounding 'NO!" on raising the debt ceiling under GWB & gave a big self-righteous speech about how stupid and damaging and near criminal doing that would be.
45 weeks ago
45 weeks ago Link To Comment
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