Subscribe free to our newsletters via your
. Earth Science News .

Debt ceiling crisis looms at year end
by Gillian White, Medill News Service
Washington (UPI) Nov 9, 2012

disclaimer: image is for illustration purposes only

While the United States has been preoccupied with electing a new president and finding ways to reduce the deficit, an issue that experts see as a more critical event has started inching closer as the country once again nears its debt limit.

The United States is on course to hit its debt ceiling, which stands at $16.4 trillion, at the close of 2012, an Oct. 31 statement from the U.S. Treasury Department said.

This will occur around the same time Congress begins deliberating on issues of national deficit reduction. The country will likely once again resort to "extraordinary measures" in order to continue meeting debt obligations through early 2013.

Experts say even if the Treasury takes the necessary steps to prevent a breach of the debt limit, it will be a very short-term solution.

"There's less money available for extreme measures than there was last year. It will buy us less time," said Steve Bell, director of the Economic Policy Project at the Bipartisan Policy Center.

The possibility of defaulting on U.S. obligations is a much more dire scenario than going over the fiscal cliff, said Patrick Lester director of federal fiscal policy at OMB Watch, a government watchdog group in Washington.

"Sequestration is nothing like the debt ceiling," said Lester. "If we had gone past the ceiling, you are really messing with the faith and credit of the U.S. Markets have every reason to freak out if we don't pay our bills."

The last time the country neared its debt limit, Congress became embroiled in conflict that threatened to shut down the government and leave the United States to default on its debt for the first time. The solution, the Budget Control Act of 2011, averted defaults but also put in place legislation that created the fiscal cliff and another round of congressional brinksmanship.

While Senate Majority Leader Harry Reid, D-Nev., and Speaker of the House John Boehner, R-Ohio, have both stated that they hope to avoid the dramatics of the last debt ceiling debate, a painless negotiation is unlikely, Lester said.

"If you read between the lines what they basically said is nothing is different today than it was six months ago," he said.

The issue of the debt ceiling will likely be pushed into 2013 as the lame duck Congress scrambles to avoid the fiscal cliff and set up a framework for deficit reduction for the 113th Congress. A means of dealing with the debt in the long term will likely be tackled alongside deficit reduction, with the issue really heating up during phase two of budget negotiations, to Lester said.

"This is just such a hodgepodge of issues that have been prolonged for so long by so many congresses all coming to a head in about 20 days," said Bell.


Related Links
The Economy

Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks DiggDigg RedditReddit GoogleGoogle

Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News

China inflation slows to nearly three-year low
Beijing (AFP) Nov 9, 2012
China's inflation rate slipped to a nearly three-year low in October, data showed Friday, leaving the authorities with room to take more steps to boost the recovery in the world's second-largest economy. The country's consumer price index rose 1.7 percent year-on-year last month, the National Bureau of Statistics announced, compared with an increase of 1.9 percent in September. The figur ... read more

Doctors without Border on first US mission

60 migrants feared drowned off Bangladesh

Uranium-polluted water escapes from Finnish mine

Sympathy for Sandy among Pakistan's forgotten flood victims

HTC and Apple reach global settlement

Nanocrystals and nickel catalyst substantially improve light-based hydrogen production

Apple still perched high, but seems vulnerable

Radar Production Readiness Review For Indonesia National Air Space Surveillance Program Completed

Superbug MRSA Identified in U.S. Wastewater Treatment Plants

Coral files reveal time of first Polynesian settlements

Bluefin tuna quotas up for renewal

Geologist calls for advances in restoration sedimentology

Carbon dioxide - our salvation from a future ice age?

No accord yet on Antarctic protected zone

UMass Amherst climate modeler identifies trigger for Earth's last big freeze

Russia backs its claims for Arctic Shelf with evidence

Arabica coffee could be extinct in the wild within 70 years

Carbon buried in the soil rises again

Scientists Identify Insect-repelling Compounds in Jatropha

Brazil's top farmers group to open office in China

Floods claim as many as 16 lives in Haitian city: officials

Guatemala quake toll lowered to 42

$38 mn needed to help victims of Nigeria floods: UN

Two dead after strong Myanmar quake

China gives $12 million towards AU peace, security efforts

W.African leaders meet on military plan for north Mali

W.African leaders prepare for Mali military intervention

Sudan rebels 'shoot down' air force bomber

Weizmann Institute scientists observe as humans learn to sense like a rat, with "whiskers"

Healthy Living Adds 14 Years to Your Life

Bigger human genome pool uncovers more rare variants

Village in Bulgaria said Europe's oldest

The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement