December 28, 2011 in Debt Crisis
Another Increase in America’s Borrowing Limit?
President set to request $1.2 trillion raise in debt limit
On December 25th, Robert J Samuelson wrote in a Washington Post opinion column that:
“There are moments when our political system, whose essential job is to mediate conflicts in broadly acceptable and desirable ways, is simply not up to the task. It fails. This may be one of those moments. What we learned in 2011 is that the frustrating and confusing budget debate may never reach a workable conclusion. It may continue indefinitely until it’s abruptly ended by a severe economic or financial crisis that wrenches control from elected leaders.”
According to the Wikipedia article Budget Control Act of 2011:
“The act will not actually reduce the overall U.S. debt over the 10-year period it is specified for, only slow down the existing rate of growth of the debt. That is partly because the cuts due to the act will not reduce federal spending in absolute terms, but rather reduce the year-to-year increases in spending from what had previously been anticipated. Even with the slowdown, both federal spending and the debt are still projected to grow faster than the U.S. economy, due to the cost curve effects of health care, which the act does not address. .
But unlike the showdown last summer, experts say GOP can’t risk the conflict again
By Meg Handley
U.S.News & World Report LP
The Associated Press contributed to this report.
Here we go again.
Treasury officials say President Obama plans to ask Congress for a $1.2 trillion bump in the debt ceiling by the end of the week as the nation’s debt is expected to fall within $100 billion of the current borrowing limit.
But no need to scout out a bunker in Wyoming yet. Experts don’t expect the President and Congress to lock horns like they did last summer over the same issue, mostly because Congress won’t reconvene until later in January and the White House’s request for more borrowing authority is in line with the deal struck in August to keep the U.S. government funded into 2013.
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