Things are not looking too good for the prevailing American debt crisis scenario. The worse is clearly round the corner.According to the facts furnished by a fresh report generated by the Bipartisan Policy Center; the country just has a time of over a month before its borrowing limit maxes out. Therefore, the American Government may not be in a position to pay all its outstanding bills. According to the authors, the date for hitting the maximum debt limit could be around February 15 and the inevitable is likely to happen anytime between March 1 and February 15.
The authors also stated that the conclusion has been based on the announcement made by Timothy Geithner, The Treasury Secretary, last month. The Secretary had stated that America had in fact maxed out on its debt limits of December 31, itself! However, certain extraordinary measures undertaken by the treasury department had succeeded in prolonging the consequences over a period of a few months. Reportedly, Geithner succeeded in freeing federal funds up to $201 billion and used them to pay government bills, averting a payment default.
The Bipartisan Policy Center has also noted that the federal government would be experiencing heavy expenses in February, inclusive of tax return payouts. The report also provides a detailed account of the consequences that might loom large if the debt ceiling level was reached. It also suggested that the best thing to do at the moment was to prioritize spends and choose to default payments on some non important bills that can wait.
This report comes in the wake of the new Congress preparing for a reconvention next week and with the new president readying for the second inauguration. The Congressional Republicans and president Obama have geared up for a fight for solving the debate surrounding the debt limit of the nation. In a speech made over the weekend, Obama clearly stated that negotiating over elevating the debt limit is simply not a possibility.
Mitch McConnell, the minority leader of the Senate appeared on NBC’s show “Meet the Press” where he emphatically echoed similar sentiments as The President stating that America could not afford to enhance its borrowing limits before its commits to the reforms that have been long overdue to the spending programs that are primarily to blame for this mounting debt pile, in the first place.