- The Washington Times - Friday, March 6, 2015

The Obama administration officially informed Congress on Friday that it will begin to bump up against the debt limit in little more than a week, starting the clock on the next debt showdown.

Under last year’s debt deal, the ceiling set by law was suspended and President Obama was able to borrow without any dollar limit until March 15 of this year. At that point the total debt accumulated by the government, which is about $18.1 trillion right now, will be locked in as the new legal limit.

Treasury Secretary Jacob Lew said he has “extraordinary measures” he can use, such as borrowing from other federal funds, which will keep funds afloat through later this year, but Congress will have to tackle the issue in the upcoming months.

“I hope that Congress will address this matter without controversy of brinksmanship,” Mr. Lew said in his letter officially information Congress.

The letter throws yet another thorny issue on Republicans’ already overloaded plate.

Top GOP leaders in both chambers have already been forced to break their pledges after the 2010 election that every dollar of debt increase be coupled with a dollar in spending cuts.

Indeed, one of the biggest debates on Capitol Hill this year is how to undo some of those past spending cuts that were enacted as part of a previous debt deal in 2011.

House Minority Leader Nancy Pelosi said a GOP fight over the debt now could threaten the economic recovery that has now begun to take off, six years after the country slumped.

“There is no reason that the Republican Congress should not act immediately to take the prospect of a catastrophic default off of the table,” the California Democrat said. “Failure to act would have savage impacts on American families: tumbling retirement savings and soaring interest rates for student loans, mortgages, credit cards, and car payments.”

The Congressional Budget Office earlier this week predicted that Mr. Lew has enough tools to prevent a full debt crisis until October or November. But waiting that long would push the issue into the middle of the looming presidential primaries.

Congress is about to enter the annual budget season, which could be a chance to get ahead of the debt deadline.

If no ceiling increase is approved, the government would have to either limit its expenses to cash that comes in, or else default on its debt obligations.

Debt has doubled over the last eight years, rising from $9.06 trillion on Oct. 1, 2007, to $18.15 trillion as of the middle of this week.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide