Congress can’t play politics with the debt ceiling

But Boehner, whose departure has left an unresolved leadership struggle, ruled out a default and said there were “several different paths” that House Republicans were discussing later Tuesday at a meeting of all House Republicans. Senate Democrats expect to provide the bulk of the votes on a clean debt bill with just enough Republicans joining them to be approved. But the gang members stick around and say, “Before we burn down your town, let’s start making plans to prioritize which parts of the town you might want to rescue before we turn violent”.

But even if the government could borrow to pay bondholders and seniors, crossing the debt limit would still be plenty apocalyptic. The shift is significant because the debt limit needs to be raised by November 3 in order to avoid a historic default on US debt.

The Treasury said it will still hold auctions for 5-year and 7-year notes next week even though they are also scheduled to settle on November. 2.

On Monday the yield on one-month Treasury bills shot up to 0.17%, the highest level since 2013 during the fiscal cliff standoff, according to FactSet. “People have to pay more for mortgages, people have to pay more for auto loans, people have to pay more for student loans”.

Meanwhile, Senate leaders from both parties said they will wait for the Republican-controlled House to vote first before acting.

Treasury specifically cited “debt ceiling constraints” caused by the current “impasse” in Washington.

Boehner has said he wants to clear the debt limit issue off of his successor’s plate.

Briggs said investors continue to believe a deal will get done, especially amid signs that Paul Ryan will become the next Speaker of the House of Representatives.

Asked about that action, White House spokesman Eric Schultz said President Barack Obama feels an urgency to address the debt ceiling.

Despite the inability of Republicans to produce a bill so far, Cornyn told reporters he was “confident” Congress will avert a default.

What we’re talking about is a plan in which Republicans try to manage the fire from their own arson, “channeling daily tax collections to the nation’s creditors and Social Security recipients” after they refuse, on goal, to raise the debt ceiling.

The legislation was largely condemned by the Treasury Department and Democrats for allowing members to pick and choose what bills to pay, calling instead for a clean increase to the limit.

It can not be healthy in the long term if the world’s largest economy keeps butting up against the debt ceiling and staves off default by borrowing money from other government funds such as the Federal Government Employees’ Pension Fund.

Republican gains in last fall’s midterm elections, along with a handful of retirements of leadership allies who voted to raise the borrowing cap last winter, mean that Boehner and McConnell need to find additional GOP votes to raise the cap.

“What I am most anxious about…is an accident”, he said.

The government makes about 80 million payments per month, including Social Security and veteran benefits, military salaries and Medicare reimbursements, Lew has said.

“Treasury has limited borrowing authority available, and cash and nonmarketable debt forecasts are extremely volatile”. If the debt limit is not increased, the repercussions would be felt at home and overseas, said Stan Collender, an expert on the congressional budget process and an Executive Vice President at Qorvis MSLGROUP.

The debt ceiling doesn’t increase government spending.

Many citizens understandably are inured to the various budget crises to which we have been subjected in recent years, and it is easy to conflate a debt ceiling crisis with a government “shutdown”.