“An editorial in the Times Union of Albany, New York, Thursday expressed alarm over the impending Aug. 2 deadline for Congress to raise the federal debt limit. It decried the latest inaction of Congress, and points to House Speaker John Boehner and Senate Minority Leader Mitch McConnell’s refusal to budge on tax cuts as a major cause of the impasse.
President Obama gathered House and Senate leaders to a White House meeting Thursday and expressed hope that the debt crisis would be resolved, giving the government an opportunity to find ways to live within its budgetary means. He urged members of both parties to come out of their comfort zones in tackling the nation’s debt.
The current federal debt limit, last increased in February 2010, stands at $14.3 trillion. That is the limit to the amount of securities that the U.S. Treasury can issue to pay for government expenses. If a deal is not reached to raise the debt ceiling before Aug. 2, some experts predict a widespread upheaval in the world’s financial markets.
The Obama administration will seek broad changes in entitlement programs, including Social Security and Medicare, in a $4-trillion reduction program, according to a Los Angeles Times report this week. This is actually larger than than the spending cuts Republican leaders have proposed and is expected to face some resistance from Democratic lawmakers, especially those facing reelection in 2012. Reportedly the administration hopes it will clear the logjam with GOP leaders, who have so far have to resisted any tax increase proposals.
What are the White house options if Congress can not come to an agreement on the debt ceiling before the Aug. 2 deadline? Treasury Secretary Timothy Geithner will not even consider it.
“”Our plan is for Congress to pass the debt limit,”" said Geithner in May, “”Our fall-back plan is for Congress to pass the debt limit, and our fall-back plan to the fall-back plan is for Congress to pass the debt limit.”"”