Tuesday, August 27, 2013

Great news! The debt ceiling deadline's been moved up

I have on a couple of recent occasions expressed anxiety (1, 2) that Democrats would be walking into a trap if they let Republicans pass a two-month continuing resolution that would effectively conflate the battle over a 2014 budget with the imperative to raise the debt ceiling.  The working assumption behind the two-month CR, as I've understood it, is that the government could get by without a debt ceiling hike until the end of November.

I was therefore glad to read this morning that the Treasury, whether by design or necessity, is quick-pitching the envisioned end-of-November double showdown.  The debt ceiling must be dealt with earlier, Treasury Secretary Jack Lew declared in a letter to congressional leaders:

The United States is set to run out of borrowing authority in mid-October, leaving the government at a high risk of not being able to pay for Social Security checks, military salaries and other operations, the Obama administration said Monday...

The Obama administration on Monday did not indicate the date that...a default [on the national debt] might occur. Rather, it said that it expects to have only $50 billion in cash on hand in mid-October, with no ability to borrow more. 
 And bottom line:
On Monday, the White House reiterated that although it will negotiate over the budget, the debt ceiling must be handled separately.

“We have never defaulted, and we must never default,” press secretary Jay Carney said. “That is our position, 100 percent, full stop.”
That line, which Obama failed to hold in the summer of 2011, is much easier to hold if deadlines for funding the government and raising the debt ceiling arrive separately. 

No comments:

Post a Comment

Share