While everyone this week was marking territory in the latest battle of the budget wars, this budget was a minor skirmish compared to the showdown looming.
Austan Goolsbee, chairman of the U.S. Council of Economic Advisers, said if Congress fails to raise the debt ceiling, the “impact on the economy would be catastrophic.”
“I don’t see why anybody’s playing chicken with the debt ceiling,” Goolsbee said today on ABC’s “This Week” program. “If we get to the point where we damage the full faith and credit of the United States, that would be the first default in history caused purely by insanity.”
The government is slated to hit the legal limit on borrowing, $14.3 trillion, early this year. Congress must agree to raise that ceiling or the U.S. could be forced to default on its obligations.
http://www.bloomberg.com/...
And unfortunately Reuters is out with a poll saying Americans oppose raising the debt ceiling.
The U.S. public overwhelmingly opposes raising the country's debt limit even though failure to do so could hurt America's international standing and push up borrowing costs, according to a Reuters/Ipsos poll released on Wednesday.
Some 71 percent of those surveyed oppose increasing the borrowing authority, the focus of a brewing political battle over federal spending. Only 18 percent support an increase
http://www.reuters.com/...
The United States will hit the legal limit on its ability to borrow no later than May 16, Treasury Secretary Timothy Geithner said on Monday, ramping up pressure on Congress to act to avoid a debt default.
"The longer Congress fails to act, the more we risk that investors here and around the world will lose confidence in our ability to meet our commitments and our obligations," Geithner said in a letter to congressional leaders.
"Default by the United States is unthinkable."
Previously, the Treasury had forecast that the $14.3 trillion statutory debt limit would be reached between April 15 and May 31. As of Friday, Treasury borrowing stood just $95 billion from the ceiling.
http://www.reuters.com/...
Then there are the new teacon representatives telling us what it will take to get their votes:
Tea Party favorite Marco Rubio, the first-term Florida senator, an upstart in the Republican Party, said this week he won’t vote to raise the $14.3-trillion debt ceiling unless Congress agrees to his proposals to fix almost every major budget issue. The U.S. will breach the limit by the end of May, according to Treasury, and could default if Congress fails to authorize an increase.
The price of his vote, Rubio wrote in a Wall Street Journal opinion article, is a plan to save Medicare and Social Security from insolvency, overhaul the tax code, revamp the way the government issues regulations, cut discretionary spending, add a balanced-budget amendment to the Constitution and an agreement to no further increases in the debt ceiling.
http://www.bloomberg.com/...
We have heard a lot already about what Paul Ryan thinks.
Total budget mayhem! For budget geeks, Tuesday provided an overwhelming abundance of excuses for wonkery, outrage and pontification. The prospect of an imminent government shutdown appears more likely than ever, and even if that scenario is avoided, a collision with the debt ceiling looms right around the corner. That should be enough for a normal week of political uproar. But just to make it all even loopier, here comes Paul Ryan, the Republican chairman of the House Budget Committee, with a radically ambitious plan to roll back the Great Society and fundamentally transform how the United States takes care of its poor, sick and elderly.
http://www.salon.com/...story=/tech/htww/2011/04/06/paul_ryans_plan_to_dismantle_the_great_society
And return of the GANG of SIX:
It’s clear that there will not be enough Republican support for an up-or-down vote on the debt ceiling itself. Some conditions will have to be attached — reforms in the budget process, broader agreement on future spending levels — to lure enough Republican votes to secure passage. The White House needs to participate in shaping those conditions at a far earlier stage than it did during the shutdown debate.
As to what those conditions might be, we retain some shred of hope that the bipartisan group of senators known as the Gang of Six will come forward with a productive contribution. The group is working off a blueprint produced by the fiscal commission that the president convened and then abandoned. Perhaps the fact that the other main alternative on the table is the considerably less centrist plan put forward by House Budget Committee Chairman Paul Ryan (R-Wis.) will lure the White House into the fray. Some advocates of entitlement reform hold out slight hope that Social Security — the easiest of the long-term issues to resolve, at least in theory — might be addressed in the context of the debt-ceiling vote, or at least before the 2012 election.
http://www.washingtonpost.com/...
And there you have it folks. If Democrats don't get it the debt ceiling raised it's big trouble for our country, and if Repubs and Teacons get their way our whole country may look very different. Damage to the full faith and country, unthinkable. Sounds like something the Tea Baggers would be all for. This time it's for everything we stand for. This time it's war.
Hope you’re ready.