Debt Ceiling Drama: House Republicans Are Ready For a Fight
Midnight Monday, Sept. 30: that’s the deadline for Congress to sign off on a budget deal. If compromises cannot be made, federal agencies will be forced to close temporarily and non-essential government staffers would stay home from work.
Related: 5 Ways a Government Shutdown Would Affect You
“This will come down to the wire,” says Yahoo Finance political reporter Chris Moody. “But I really don’t think there will be a shutdown.”
The new fiscal year begins Oct. 1. Congress flirted with a shutdown in April 2011 before agreeing to a continuing spending resolution. In December 1995 the government closed for 28 days until the spending standoff between President Bill Clinton and Republican leaders in Congress ended.
But the budget crisis may be the least of lawmakers’ concerns, notes Moody.
“The bigger fight is over the debt ceiling…and House Republicans have been preparing for this for a long time,” he tells The Daily Ticker.
Currently the nation’s borrowing limit stands at $16.7 trillion. Every year Congress raises the federal debt ceiling so the government can pay its bills. Increasing the debt ceiling had always been a routine procedure that was supported by both political parties; it has been raised 78 times in 53 years. But Republican lawmakers now see the debt ceiling as a way to get concessions from Democrats and President Obama on issues they feel are important, such as delaying or defunding the president’s signature health care law (Obamacare) and getting approval of the Keystone XL pipeline.
Related: The Obamacare Premium: The One Group of Americans That Can Expect to Pay More
Treasury Secretary Jack Lew urged lawmakers to tackle the debt ceiling before Oct. 17, or risk defaulting on the nation's financial obligations.
“If Congress were to repeat that [2011] brinkmanship in 2013, it could inflict even greater harm on the economy,” Lew said. “And if the government should ultimately become unable to pay its bills, the results would be catastrophic.”
Lew’s comments certainly put pressure on Republicans but it may not be enough to broker an agreement, Moody says. Republicans believe Obama is “bluffing” about negotiating and are forging ahead with their plans to indefinitely postpone the Jan. 1, 2014 start date of the federal insurance marketplaces that were created as part of the health care law.
The Senate voted 100-0 on Wednesday to end debate on the House budget bill that would fund the government for the next three months. The proposed bill stripped taxpayer dollars for Obamacare.
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