Don’t Look Now, But We’ve Hit the Debt Ceiling

We’ve reached the debt limit, and we’re all still alive. I looked out the window this morning to see if the sky was falling, but it’s still up there. (It is dumping a lot of rain, which is probably unrelated, but Democrats may try to spin it otherwise.) Apparently, it really isn’t as bad as they’ve been telling us it would be, seeing that the folks in Congress have taken a lot of vacation time lately, and they’re still no closer to a deal than they were before.

The Wall Street Journal reported:

The Treasury Department plans to announce Monday it will stop issuing and reinvesting government securities in certain government pension plans, part of a series of steps designed to delay a default until Aug. 2.

The Treasury’s moves buy time for the White House and congressional leaders to reach a deficit-reduction agreement that could clear the way for enough lawmakers to vote to raise the amount of money Congress allows the nation to borrow.

Gene Sperling, director of the National Economic Council, said reaching the debt ceiling “should be a warning bell to the political system that it’s time to get serious about preserving our full faith and credit.” The Obama administration says a default would tip the U.S. back into a financial crisis.

Well then, why don’t they get serious about cutting spending? If they don’t get that under control, we’ll be in a permanent financial crisis.

As far as the possibility of any deal being struck, even though Republicans are playing nice, there’s still a lot of space between the two sides.

Ultimately, whatever the talk of cooperation, Democrats and Republicans are unyielding on their core principles. For Democrats, it’s a matter of the government maintaining control of entitlement programs for the elderly and poor.

For Republicans, they insist on one thing — for every dollar in debt the ceiling is raised, spending needs to be cut in equal measure.

“When we say we want at least as much spending cuts for debt limit increase and the president throws up a $2 trillion number, that’s where you’re getting the $2 trillion number. If he says let’s do a trillion in spending increase, then we want at least a trillion in spending cuts,” Ryan said on CNN.

But Ryan did offer some bipartisanship.

“Both parties messed this up. This is not a Republican-created problem or a Democrat-related problem. It’s both parties and we’ve got to face up to that if we’re going to get this situation under control,” Ryan said.

Update: Linked by Obama Press – thanks!

Update 2: Troglopundit linked – thanks!

Tags: deal, debt limit, Democrats, republicans