Debt Ceiling Limit Approaching

Earlier this week, Treasury Secretary Jacob Lew sent a letter to Congress informing them that the debt limit will have to be raised by mid-October in order to avoid default.

The ARRA News Service has addressed this situation in numerous prior articles which you may wish to review.

Our nation is now nearly $17 trillion in debt with a long-term outlook that shows
rising deficits well into the foreseeable future. President Obama insists we don't have a deficit crisis, yet the reason we keep hitting the debt ceiling is because of years of trillion-dollar deficits  and record federal spending. Americans deserve a balanced approach that puts the nation on a stable trajectory by pairing any debt increase with at least equal cuts.Raising the debt ceiling and allowing more borrowing without making reforms that will reduce future deficits is simply irresponsible.

At the beginning of 2013, Congress passed a measure to suspend the debt ceiling until May 19. The legislation allowed the Treasury Department to continue to borrow money to fund government operations.

Because revenues are higher this year and because spending has decreased due to the cuts of the Budget Control Act, Washington is now only borrowing 21 cents out of every dollar it spends (compared to 31 cents last year).

The U.S. has already reached the debt ceiling, but is currently undertaking “extraordinary measures” to continue to meet its financial obligations. It is expected thatthose extraordinary measures will be exhausted in mid-October. Congress should pass a package of responsible spending cuts matched with a debt limit increase prior to hitting the debt ceiling.

The last debt ceiling debate in 2011 had very real consequences. Just days after the debt ceiling was raised, the United States’ credit rating was downgraded for the firsttime ever by Standard & Poor’s because of the failure to enact meaningful reforms.Other agencies also warned of possible downgrades in their ratings.

• S&P explained at the time, “The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium:term debt dynamics.”

Washington is currently enjoying the largest revenue stream in history, and is estimated to take in $3.042 trillion in tax revenue for fiscal year 2014. Sadly, because of profligate government spending over the past 6 years, or national debt is increasing at record levels that CBO says will lead to economic disaster. It’s clear that Washington has put this country on the precipice of a spending-driven debt crisis. It’s clear the Obama administration doesn’t take fiscal responsibility seriously. The president’s own budget included $3.78 trillion of total spending with tax increases of $580 billion. The budget would not have balanced at any point and would have put the country on the path to a projected $21.7 trillion in debt by the end of 2018. Politicians need to get real about our debt and use this opportunity to address future deficits. Source Date: Public Notice

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