Lawmakers could be forgiven for being confused or skeptical about exactly when the U.S. will hit the debt ceiling. They were originally warned it would come much earlier than Aug 2.
“The first date that Congress was supposed to reach a debt ceiling was on March 31, between that date and May 16, so members of Congress legitimately have real concern if this August date is real date or yet another fake deadline,” said Brian Darling, a senior fellow at The Heritage Foundation, a conservative think tank.
Many lawmakers and analysts of all stripes believe the U.S. will bump up against the $14.3 trillion debt ceiling sometime in August. But they have different views about what that means for the country.
For instance, the U.S. would still have enough tax revenues to cover some 56 percent of its bills.
“With our actual cash flow requirements, that will permit payments on the national debt interest, Social Security, Medicare, and most defense spending,” said University of Maryland economist Peter Morici. “Beyond that, there would be very little cash left.”
Twenty-three Republican senators wrote a letter to President Obama a month ago urging him to develop contingency plans well ahead of hitting the debt ceiling.
“It would not be pleasant operating under a 'Debt Ceiling Budget,' and no one is recommending it. But it would not be Armageddon," the letter said.
But officials would have to sort through the pile of 80 million bills a month, and decide which ones to pay.
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