Debt Limit Will Likely Not Need To Be Raised Until Fall
The United States has been operating in a state of bliss over the past year or so when it comes to the nation's debt limit.
That state of bliss ended on March 15th with the expiration of 128 Stat. 1011, which was passed into law on February 15th, 2014. This statute increased the debt ceiling as high as needed up until this past Sunday. The debt ceiling is now the amount of debt outstanding as of today, which will be approximately $18.15 trillion.
The nation has endured fights over the debt ceiling before. In the summer of 2011, a nasty fight over the debt ceiling finally came to an end. The result? A downgrade of the country's credit rating.
After several nasty battles over the past 4-5 years, the two sides finally agreed to let the issue slide after they agreed to 128 Stat. 1011. That period of bliss, however, has now drawn to a close.
According to Treasury Secretary Jacob Lew, the nation must now use "extraordinary measures" in order to continue to pay its bills. These measures include the ceasing of investments in a pension fund for federal employees, amongst other things.
A conclusion to this latest debt ceiling flare-up will likely not come anytime soon. According to the Congressional Budget Office, the country can likely continue operating until the fall using "extraordinary measures". You can take it to the bank that the Democrats and Republicans will wait until the last possible second to hammer out a deal.
Democrats, however, will have less power this time around as the Republicans now control both the House and the Senate. Senate Majority Leader Mitch McConnell is aware of this fact, as he recently stated that any upcoming debt ceiling legislation "might carry some other important legislation that we can agree on in connection with it." McConnell has also stated that he is hopeful that some "compromises" can be worked out over the coming months.
In short - prepare yourself for more last minute negotiations and talk of impending doom when the summer ends.
Filed under: General Knowledge