U.S. is about to exceed the debt ceiling without accounts for 2011
POZZI MICHAEL / THE COUNTRY
United States is playing with fire. The ability of federal government debt is the limit and operating agencies for six months with a budget emergency. And if lawmakers on Capitol Hill do not park their ideological differences soon, you will not need to Moody's or Standard & Poor's lowered the credit note to trigger a "chaos."
is the expression used by the Federal Reserve chairman, Ben Bernanke, to expose the seriousness of the situation in his last appearances before Congress. And in response to a statement from Timothy Geithner, Treasury secretary, and we would be touching the red line. His department expects that between 15 April and 31 May, exceeding the debt ceiling, set a year ago at $ 14.3 billion.
The escalating last decade has been dramatic when compared with 5.7 billion hole in 2000. Hence rose to 10.7 billion with George Bush. Now verges on 100% of GDP. But if that roof does not rise again, the Treasury does not have the capacity to borrow and not be able to pay outstanding bills, unless they take drastic spending cuts.
In practice, the Treasury will be forced to pay higher interest debt and this will cause further aggravation of the deficit, which is poised to touch $ 1.6 trillion (10% of GDP). To this must be added the loss of investor confidence due to the inability of Washington to maintain order at home, I could do even more damage to the dollar and forced to raise rates.
Bernanke insists that can not exceed this limit or even 20 minutes. The case of peripheral Europe shows how far the punishment when the markets doubt the country's fiscal integrity. And while the budget debate is taking place away from the city, the impact of a failure in the daily lives of Americans will be significant.
The time is at hand, and that makes you nervous to Jamie Dimon, CEO of JP Morgan Chase. "If someone wants to click that button, it will be catastrophic and unpredictable so I think they're crazy," said the banker to the House of Commerce, the leading business lobby in Washington. More pressure, therefore, on the White House and Congress. What worries Wall Street is that in Washington, particularly in the Republican caucus, is linked to the need to raise the debt ceiling to cut public spending. The conservative wing, disturbed by the movement of the Tea Party and the majority in the House of Representatives, he feels strong enough to stand up to Democrats.
is the new balance of power that exists after the November mid-term. Bernanke shares to make the necessary changes in the budget for deficit reduction. But asked not to confuse the long-term priorities of discipline prosecutor with the immediate economic challenges. It was his way of saying that the ceiling should be raised so that the recovery is not truncated.
The battle is not new and takes shape every time the U.S. Congress is shaping the budget. This time, what makes the difference is the political climate and the emergence of the Tea Party, do not hesitate to use the spending limit as a hostage to force a reform of Medicare (public health care to retirees), Medicaid (vulnerable people) and Social Security (pensions).
One of the most visible is Senator Marco Rubio, who has said he would vote against raising the expenditure ceiling. To defend their arguments, the star recalled Tea Party Barack Obama took a similar position against the initiative of Republican George Bush when the president was now a senator in 2006. He supports seamless Michele Bachmann, who considers the procedure as "a license to Congress to keep spending."
This collision is causing the U.S. government, the world's largest corporation, operating since October with a limited budget which is extended every two weeks. On Friday, the latest extension expires 8, designed to give room for negotiation and reaching a consensus for approving the spending package for the six remaining months of the year 2011.
Vice President Joe Biden spoke Wednesday in an attempt to move things and close the gap quickly. He met with Democratic Party leaders in the Senate, where a majority. "We are working in the same issue. But obviously there are differences in the composition of that figure, what to include and what not," he said after the meeting. That figure is 33,000 million. The House has already adopted a budget that includes cuts in the amount of 61,000 million for 2011, which was blocked by the Senate. With the last two extensions were achieved savings of 10,000 million. Now the Republicans want a grant of 23,000 million more, which could be accepted by Obama.
Robert Bixby of the Concord Coalition, compared the crash with the battle of the Three Stooges in the backseat of a car approaching a cliff. So ask Congress and President Obama to reach an early compromise on the budget for the remainder of 2011 and faces "seriously" the debate over tax reform the country needs long-term.
"We're trying to find a formula that everyone is comfortable," said Rep. Harold Rogers, but that will take some time. The leader of the House of Representatives, John Boehner, adding that "nothing will be closed until everything is agreed." But he knows that this cut will be the largest in U.S. history and looks at what can be achieved in 2012.
Division also extends to citizens. When asked who is better to face debate, 46% responded in favor of Obama and the Democrats. 45% aligned with Republicans. It is also true that liberals, when dominated the two chambers, and were unable to pass the budget.
As Biden says, "there is no reason why, with all that is happening in the world and the state of the economy, do not avoid the paralysis of government." But if there is some agreement on 8 April, Washington will begin to cease non-core activities, which will return to a situation very similar to Bill Clinton lived for 15 years.
POZZI MICHAEL / THE COUNTRY
United States is playing with fire. The ability of federal government debt is the limit and operating agencies for six months with a budget emergency. And if lawmakers on Capitol Hill do not park their ideological differences soon, you will not need to Moody's or Standard & Poor's lowered the credit note to trigger a "chaos."
is the expression used by the Federal Reserve chairman, Ben Bernanke, to expose the seriousness of the situation in his last appearances before Congress. And in response to a statement from Timothy Geithner, Treasury secretary, and we would be touching the red line. His department expects that between 15 April and 31 May, exceeding the debt ceiling, set a year ago at $ 14.3 billion.
The escalating last decade has been dramatic when compared with 5.7 billion hole in 2000. Hence rose to 10.7 billion with George Bush. Now verges on 100% of GDP. But if that roof does not rise again, the Treasury does not have the capacity to borrow and not be able to pay outstanding bills, unless they take drastic spending cuts.
In practice, the Treasury will be forced to pay higher interest debt and this will cause further aggravation of the deficit, which is poised to touch $ 1.6 trillion (10% of GDP). To this must be added the loss of investor confidence due to the inability of Washington to maintain order at home, I could do even more damage to the dollar and forced to raise rates.
Bernanke insists that can not exceed this limit or even 20 minutes. The case of peripheral Europe shows how far the punishment when the markets doubt the country's fiscal integrity. And while the budget debate is taking place away from the city, the impact of a failure in the daily lives of Americans will be significant.
The time is at hand, and that makes you nervous to Jamie Dimon, CEO of JP Morgan Chase. "If someone wants to click that button, it will be catastrophic and unpredictable so I think they're crazy," said the banker to the House of Commerce, the leading business lobby in Washington. More pressure, therefore, on the White House and Congress. What worries Wall Street is that in Washington, particularly in the Republican caucus, is linked to the need to raise the debt ceiling to cut public spending. The conservative wing, disturbed by the movement of the Tea Party and the majority in the House of Representatives, he feels strong enough to stand up to Democrats.
is the new balance of power that exists after the November mid-term. Bernanke shares to make the necessary changes in the budget for deficit reduction. But asked not to confuse the long-term priorities of discipline prosecutor with the immediate economic challenges. It was his way of saying that the ceiling should be raised so that the recovery is not truncated.
The battle is not new and takes shape every time the U.S. Congress is shaping the budget. This time, what makes the difference is the political climate and the emergence of the Tea Party, do not hesitate to use the spending limit as a hostage to force a reform of Medicare (public health care to retirees), Medicaid (vulnerable people) and Social Security (pensions).
One of the most visible is Senator Marco Rubio, who has said he would vote against raising the expenditure ceiling. To defend their arguments, the star recalled Tea Party Barack Obama took a similar position against the initiative of Republican George Bush when the president was now a senator in 2006. He supports seamless Michele Bachmann, who considers the procedure as "a license to Congress to keep spending."
This collision is causing the U.S. government, the world's largest corporation, operating since October with a limited budget which is extended every two weeks. On Friday, the latest extension expires 8, designed to give room for negotiation and reaching a consensus for approving the spending package for the six remaining months of the year 2011.
Vice President Joe Biden spoke Wednesday in an attempt to move things and close the gap quickly. He met with Democratic Party leaders in the Senate, where a majority. "We are working in the same issue. But obviously there are differences in the composition of that figure, what to include and what not," he said after the meeting. That figure is 33,000 million. The House has already adopted a budget that includes cuts in the amount of 61,000 million for 2011, which was blocked by the Senate. With the last two extensions were achieved savings of 10,000 million. Now the Republicans want a grant of 23,000 million more, which could be accepted by Obama.
Robert Bixby of the Concord Coalition, compared the crash with the battle of the Three Stooges in the backseat of a car approaching a cliff. So ask Congress and President Obama to reach an early compromise on the budget for the remainder of 2011 and faces "seriously" the debate over tax reform the country needs long-term.
"We're trying to find a formula that everyone is comfortable," said Rep. Harold Rogers, but that will take some time. The leader of the House of Representatives, John Boehner, adding that "nothing will be closed until everything is agreed." But he knows that this cut will be the largest in U.S. history and looks at what can be achieved in 2012.
Division also extends to citizens. When asked who is better to face debate, 46% responded in favor of Obama and the Democrats. 45% aligned with Republicans. It is also true that liberals, when dominated the two chambers, and were unable to pass the budget.
As Biden says, "there is no reason why, with all that is happening in the world and the state of the economy, do not avoid the paralysis of government." But if there is some agreement on 8 April, Washington will begin to cease non-core activities, which will return to a situation very similar to Bill Clinton lived for 15 years.
