Debt Ceiling Crisis Round 2?

Yet another round of debt ceiling talks is starting in Washington this month. Republican leadership has made it clear that it will not allow the United States government to default, but that does not mean that raising the debt ceiling will be an easy process.

The last debt ceiling crisis ended when a temporary measure was put in place to end the 16 day government shutdown. That deal only gave the government the power to borrow additional funds until February 7^th. However,  the Treasury Department has the authority to use “emergency measures” to borrow money to pay the bills until the end of the month. That authority is estimated to expire on or before March 14.

Currently there is not a proposal that will be able to pass solely with Republican support so a compromise must be reached to gain Democratic support. They will have to do this quickly as it seems that Congress is waiting to the last minute once again.

Votes to raise the debt limit often carry rider provisions that go beyond simply raising the debt limit. This time is no exception, despite President Obama’s protests. There is bipartisan support for a provision to reverse military retiree cost of living cuts that were enacted last year as well as for a provision to allow employers to delay employee pension contributions. Somehow health-care reform and the Keystone Pipeline got thrown in the mix too, but with predictably partisan reactions and therefore a predictable lack of a timely deal.  

It seems that Congress is intent on playing this game of chicken with our economy so long as a few favored provisions, that could or should be in a separate bill, get passed. Personally, I find it somewhat hard to believe (though I really shouldn’t) that Congress just kicked this problem down the road a few months instead of passing a longer term solution. Even more shocking is that the end of their last solution is already just a day away and it does not appear that another agreement of some kind is imminent. One can only hope that Congress can get their act together enough to avoid another government shutdown.

--Price Bohrer

For those of you who want a quick refresher course on the shenanigans involved with the debt limit and how the US budget works, check out the linked video by CPG Grey. http://www.youtube.com/watch?v=KIbkoop4AYE