Congress scraps BIG debt ceiling raise for smaller one - default mentioned

[devil21]

This is quite an interesting turn of events! Just days ago the proposal of nearly $2T debt ceiling raise was proposed but suddenly it's going to be $300B, but much faster. The word "default" is mentioned. Is something happening here? They just passed a $1T spending bill yet this and talk of needing to lower the deficit?

http://news.yahoo.com/s/nm/20091215/..._congress_debt

WASHINGTON (Reuters) – The House of Representatives will vote on a short-term boost to the U.S. debt limit this week to avoid a government default and give lawmakers more time to try to cut the record federal deficit, House Democratic leader Steny Hoyer said on Tuesday.

Leaders are considering raising the current debt limit of $12.1 trillion by about $200 billion to $300 billion.

"Essentially that will get us an additional two months of fiscal ability," Hoyer told his weekly news conference.

Lawmakers hope to pass the debt-limit increase this week, along with a jobs-creation package.

Democratic leaders previously wanted to raise the limit by at least $1.8 trillion, enough to take care of the government's debt needs through the November 2010 congressional elections.

The smaller debt hike would cover government borrowing for about two months. That gives Democrats more time to resolve competing plans to get the budget under control, but forces them to revisit the issue again amid rising public concerns about the budget deficit.

[Sarge]

They have maxed out the charge cards. It is not going to end well unless they start massive cuts in spending. That is not likely to happen.

All the massive pork is now well done and they can't afford the BBQ sauce.

Brace for two months from now when tax receipts will be even lower.

[smithtg]

This is quite an interesting turn of events! Just days ago the proposal of nearly $2T debt ceiling raise was proposed but suddenly it's going to be $300B, but much faster. The word "default" is mentioned. Is something happening here? They just passed a $1T spending bill yet this and talk of needing to lower the deficit?

http://news.yahoo.com/s/nm/20091215/..._congress_debt

the real question is who is defaulting on who? I mean US government, big bankers all one big happy family. Now if the government stops paying interest on debt then some of our debt holders might be a bit pissed.

This government was bankrupt a long time ago - its sort of like a fat guy running down the street naked in the morning when nobody is awake. The sun is soon rising and his bare ass will be there for everyone to see

[squarepusher]

haha, sounds like they are bailing out themselves now. Give 1 to help (TARP), take 3 for yourself (2 T deficit cap). Thats generosity for you.


But yes, talk of government default so nonchalant seems to be a bit concerning also here.

[Lafayette]

If we go by the US debt clock, they are already of the limit by $25 billion.
This sure hasnt stopped them from swiping the credit card.

http://www.usdebtclock.org/

[Kludge]

Interesting. I wonder who or "what" demanded this assurance.

I guess the Obama administration will be going for the tried-and-true surge method. Throw lots of money at the problem now and in the near future to cut expenditure at an unspecified time later.


(and lololol @ this advertisement )

[cbc58]

this is going to get ugly. my congressman said 8 months ago that a huge state rescue package will be needed. just change the accounting rules and everything will be fine...

this is like we're in a soccer match and we were the #1 team in the world for years and now were in a match with a team that we used to scoff at we are down 7 to 0 with 3 minutes remaining. the captians talk it up and say we can do it and come back... because we are Amercia... but there is no way in hell it will happen.

[LDA]

How do they think they're going to reduce the deficit? Is there even any plan in place to do so? Do they realize they would have to make substantial cuts across the board, including cuts to popular programs that might cost them votes?