While the average American family is working out daunting problems of health care coverage, home mortgage payments, financing a college education and making ends meet -not to mention saying goodbye to summer – Congress returns on Sept. 9.
Those same average Americans want the feds to round up the folks responsible for paternity of the economic crisis, slap the cuffs on them and send them to Guantanamo. But they have come to understand that no wealthy client is ever guilty until they run out of money.
The long August recess was a chance for lawmakers to hear from constituents, chill out and recharge their batteries before returning to the capitol to address two major budget deadlines: Funding the government for the 2014 fiscal year that begins Oct. 1, and once again raising the nation’s debt ceiling.
Since Congress is only in session for nine days in September and there is little hope for a broader deficit reduction agreement with the White House, lawmakers will likely pass a continuing resolution to avoid a partial government shutdown. Republicans will try to leverage the need to raise the debt ceiling to extract cuts in Obamacare and other government spending. The debt ceiling is the maximum amount of gross debt Congress allows the federal government to carry. The current limit is $16.7 trillion.
In the summer of 2011, the White House and congressional Republicans locked horns in a bitter fight over the ceiling. An agreement was finally reached in August to increase the debt ceiling through the early part of 2013 as part of the Budget Control Act, which set caps on certain spending levels and led to across-the-board “sequester” cuts that are scheduled to continue through 2021. After this debt ceiling debacle, Standard & Poor’s reduced its rating on long-term U.S. debt from AAA to AA+ reflecting the federal government’s dysfunctional politics.
The Treasury Department says the government will reach its borrowing limit in mid-October and be unable to pay all its bills soon after. The feds actually hit the ceiling on what it could borrow in May. Since then, Treasury has used a variety of accounting techniques to continue to borrow. A sharp decline in spending this year and repayments from bailed out mortgage fmance giants Fannie Mae and Freddie Mac also eased the reliance on debt.
Republicans are demanding significant new spending cuts in exchange for increasing the $16.7 trillion debt limit, with some also insisting on delaying or scrapping Obamacare. They want any increase in the debt limit offset dollar-for-dollar by other cost savings.
Meanwhile, the President insists he will not negotiate on the debt limit to pay the bills Congress has racked up. It is worthwhile noting that as a senator, President Obama voted against raising the debt ceiling. This debt ceiling stalemate could shut down the government, force the first default on U.S. debt in the nation’s history and add to the general anxiety besetting the average American, who has come to believe that what passes for fiscal governance is a political gong show.
This just isn’t a problem with politicians, it’s also a problem with voters, who say deficits and debt are major concerns, but favor government spending to create jobs and oppose major cuts to most government programs. They want something for nothing.
What lies ahead is another replay of this tired script and before the ink is even dry on the latest budget deals; they will become part of the permanent, rolling fiscal cliff. The choices are pure Woody Allen: “More than at any other time in history, mankind is at a crossroads. One path leads to despair and utter hopelessness, the other to extinction. Let us pray we have the wisdom to choose correctly.”
originally published: September 7, 2013
