U.S. Congress needs to act as the country reaches its debt limit
The U.S. government has to raise the debt limit within the next three weeks as money is beginning to run out in Washington and the Treasury Department is warning the Capitol of the fiscal deadlines approaching.
Congress needs to act quickly.
According to Jacob Lew, Treasury Secretary, only $30 billion cash will be left “no later” than October 17th – and the Budget Office predicts that this will be spent within a week or two.
Mr Lew previously stated that “failure to meet that responsibility would cause irreparable harm to the American economy.”
The government has payments of around $55 billion due November (to cover Medicare, Social Security and Military costs).
Legislation to increase the ceiling on government borrowing is the only means of addressing the issue and generating the money to pay those costs.
Currently, lawmakers struggle to come to an agreement as to how to fund the Government in the short-term and long-term. Republicans and Democrats have very different opinions on how to deal with the issue.
Senator Mark Warner said that people now have “a false sense of security. This time, the wolf really could be at the door.”
Following Sen. Ted Cruz’s rather lengthy speech – which criticized the White House’s health-care law – the Senate decided to continue with a multi-day process to debate legislation on funding the government at the start of the next fiscal year (this October).
Ironically, Senator Cruz agreed to a plan that would provide further funding for Obamacare.
However, the short-term funding issue is dwarfed by the current $16.7 trillion borrowing limit – which is on the verge of being hit.
As Mr. Lew put it, if Congress fails to raise the debt ceiling up from $16.7 trillion, it will “be impossible for the United States of America to meet all of its obligations for the first time in our history.”
The White House is not willing to negotiate with lawmakers about how to raise the debt ceiling – it should simply be raised without conditions.
Senator Bob Corker said that he hopes “our central focus will be on dealing with our longer-term fiscal issues.”
Rep. Peter Welch commented that some Republicans are acting “pretty wild” and “what you’re seeing is people who actually believe that it’s a legitimate tactic to blow up the country in order to achieve a goal, which is to get rid of Obamacare.”
The Bipartisan Policy Center estimates that the government will not be able to meet about 32% of its payments due in just the first month if the ceiling is not raised on time.