US hits debt ceiling; world does not end

The Obama administration will begin to tap federal retiree programs to help fund operations after the government loses its ability Monday to borrow more money from the public, adding urgency to efforts in Washington to fashion a compromise over the debt.

Treasury Secretary Timothy F. Geithner has warned for months that the government would soon hit the $14.3 trillion debt ceiling — a legal limit on how much it can borrow. With the government poised to reach that limit Monday, Geithner is undertaking special measures in an effort to postpone the day when he will no longer have enough funds to pay all of the government’s bills.

Will there be a deal? Only if the WH agrees to spending cuts. But the debate itself has already force the administration into a tough choice on federal employee pensions.

“I’m ready to cut the deal today,” Boehner said. “We don’t have to wait until the 11th hour. But I am not going to walk away from this moment. We have a moment, a window of opportunity to act, because if we don’t act, the markets are going to act for us.”

Geithner’s plan to tap federal retiree programs as a temporary means to avoid a government default comes as the Obama administration has shown growing interest in altering those programs to curb the debt in the long run.

Administration officials have expressed interest in raising the amount that federal employees contribute to their pensions, sources told The Washington Post.

So the debate has already been useful in forcing the WH to concede some ground. Boehner, the Republicans and a number of Democrats need to keep pressing, and a plurality of the American people back will them.

By a 47% to 19% margin, Americans say they would want their member of Congress to vote against raising the U.S. debt ceiling, while 34% don’t know enough to say. Republicans oppose raising the debt ceiling by 70% to 8% and independents by 46% to 15%. Democrats favor raising the ceiling by 33% to 26%.

As I said on America’s Radio News earlier today, we cannot keep treating the debt ceiling the way the pirates in Pirates of the Caribbean treated the “pirate code”: as more suggestions than actual rules. No increase in the debt ceiling should pass without serious spending cuts and reforms.