With pressure mounting, lawmakers in Congress need to solidify the restructures of the financial system and get the controversial health-care legislation passed. Now many are calling for an increase in the maximum amount of money the federal government is allowed to borrow.
Treasury Secretary Geithner has made it clear to in a letter to legislators that he wants an answer as soon as possible on a proposed increase in the nation’s statutory debt limit. The Treasury Secretary underscored the need by noting that current estimates show that the current limit of $12.1 trillion will be reached by mid-October.
“It is critically important that Congress act before the limit is reached so that citizens and investors here and around the world can remain confident that the United States will always meet its obligations,” Geithner said in the letter.
A spokesperson for Senate Majority Leader Harry Reid said that Democratic leaders in the Senate planned to work with the Treasury Department to produce viable debt limit legislation.
Perhaps, one of the major issues that will be addressed is how much of an increase is needed. Geithner did not provide a particular figure in his recent letter to Congress.
Treasury officials were quick to point out that the debt increase was due in larger part to the deterioration in the U.S. economy and not so much a result of the spending related to the bailout and various stimulus programs.
All of this services to spotlight the difficulties that the Obama Administration and Congress are facing as they struggle to resolve the nation’s flagging fiscal condition in a weak economy. According to the Congressional Budget Office, a non-partisan group, the federal government’s budget is poised to reach a record high $1.8 trillion for the 2009 fiscal year, after it had already reached $1.3 trillion during the first 10 months of the fiscal year.
Should the Congress agree to the request may by the Treasury, it would be the second increase in the debt ceiling for 2009. The stimulus package that was pushed through Congress earlier this year escalated the ceiling by $789 billion to a total of $12.1 trillion. Back on August 7, the federal outstanding debt was figured at $11.7 trillion.
Republicans in Congress appear ready to use the vote on whether to raise the debt ceiling as a means of illustrating their view on economic issues as compared with Democrats as well as position arguments concerning Obama’s health care initiatives and climate change and how they would further deepen the country’s fiscal challenges.
Tags: national debt limit
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