US may have way to cover bills after deadline, for week Inflow of tax payments, Treasury maneuvering might buy some breathing room By BINYAMIN APPELBAUM updated 7/26/2011 9:26:03 PM ET
WASHINGTON — It turns out the federal government is sitting on some extra cash. Thanks to an inflow of tax payments and maneuvering by the Treasury Department, the government can probably continue to pay all of its bills for several days after Aug. 2, providing potentially critical breathing room for Congress to raise the debt ceiling, according to estimates by several Wall Street banks and a Washington research organization.
The consensus is that the government will not run short of money until Aug. 10, when it would be unable to cut millions of Social Security checks without borrowing more money. President Obama has described Aug. 2 as a “hard deadline” for Congress to increase the maximum amount that the government is allowed to borrow.
“We have to do it by next Tuesday, Aug. 2, or else we won’t be able to pay all of our bills,” Mr. Obama told the nation in his speech on Monday night.
The amount of fear tactics and just straight out lies the president is pushing is disgraceful, there is no reason like I said before to default with the revenue we take in already. Some in the GOP houses are already coming up with a solution to use the revenue to pay the priorities like SS, soldiers pay, ect in case the debt ceiling isn't raised.
"In the beginning of a change, the Patriot is a scarce man, brave, hated and scorned. When his cause succeeds, however, the timid join him, for then it costs nothing to be a Patriot."
We really need to get this raised. Perhaps add on language making it illegal to do again, therefore forcing our stupid 2 party representatives to actually do their jobs. Will it be the end of the world if we default, no. Will it cost us a ton of money and status, yes. Our stupid leaders need to compromise, that's how an efficient government runs. People in both parties need to stop dealing with absolutes such as we won't raise taxes, or we won't cut this or that and get a compromise bill passed.
Now they are trying to blame the newly elected, by a landslide tea partiers. How soon they forget that the tea party candidates were elected 'by the people' to make a 'change' in washington. If the change that people were expecting and hoping for, doesn't come to fruition, they will be voted out....along with Boehner!!
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
The Senate rejects yet another plan to raise the debt ceiling that passed in the house.
"In the beginning of a change, the Patriot is a scarce man, brave, hated and scorned. When his cause succeeds, however, the timid join him, for then it costs nothing to be a Patriot."
Now they are trying to blame the newly elected, by a landslide tea partiers. How soon they forget that the tea party candidates were elected 'by the people' to make a 'change' in washington. If the change that people were expecting and hoping for, doesn't come to fruition, they will be voted out....along with Boehner!!
YUP! They will!
The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. John Kenneth Galbraith
It’s really sad to see how this country has declined economically over the past few decades. We’ve gone from the strongest power on Earth, both economically and politically, to the very brink of insolvency. And what do our “representatives” do? They play politics. I’m so tired of hearing congressmen declare themselves “fi scal conservatives,” when in actuality all they are is fi scally irresponsible. To be unwilling to entertain the idea of modest tax increases for the wealthiest, while pushing to cut benefits to the middle and lower economic classes, is not fiscal conservatism, it’s politics as usual. Their goal is not to serve this country but to line their coffers for the next election. When did this country stop being “of the people, by the people and for the people,” and become “of the wealthy, by the wealthy and for the wealthy?”
Tax Pledge? What nonsense! What about the Pledge of Allegiance? The country is under attack by tea party Republicans, bankers, Big Oil, mega corporations, their lobbyists and other mercenaries. The tea party people can’t go home with new taxes, or the preservation of the safety nets, because it might make [Republican activist] Grover Norquist, [conservative talk show host] Rush Limbaugh, [former House majority leader and economist] Dick Armey, etc. cry! Who cares? Millionaires could not possibly pay one more dollar in taxes? Does this sound sensible? Corporate welfare, taking from the least to give to those with the most, is obscene and un-American. It is time to wake up and stop the greedy ones from proceeding with their destructive policies of deregulation. Any loopholes will be quickly opened and expanded by the army of lawyers financed by the unscrupulous captains of industry. Shame on those who have no shame!
Moody's: Neither debt plan protects the nation's AAA rating By Peter Schroeder - 07/29/11 05:11 PM ET
The "limited magnitude" of both debt plans put forward by congressional leaders would not put the nation's AAA credit rating back on solid footing, Moody's Investors Service announced Friday.
"Reductions of the magnitude now being proposed, if adopted, would likely lead Moody's to adopt a negative outlook on the AAA rating," the credit rating agency said in a new report. "The chances of a significant improvement in the long-term credit profile of the government coming from deficit reductions of the magnitude proposed in either plan are not high."
It added that "prolonged debt ceiling deliberations" have increased the odds of a downgrade, but that the firm is still confident policymakers will avoid a default.
"It remains our expectation that the government will continue with timely debt service," the firm said. It also clarified that as far as it is concerned, the nation will only default if it misses an interest or principal payment on U.S. debt, not if it misses payments on other obligations like federal employee salaries or Social Security benefits.
The report also gives credence to a claim popular among Republicans: that the government has enough cash to avoid a default even past the Aug. 2 deadline set by the Treasury Department. "If the debt limit is not raised before August 2, we believe that the Treasury would give priority to debt service payments and could thus postpone a potential debt default for a number of days," it said. "Revenues would be more than adequate for some period of time to meet those payments, although other outlays would be severely reduced as a result."
Moody's previously put the nation's top credit rating on watch for a downgrade on July 13, as lawmakers continue to fight over a deal to raise the debt limit.
While Moody's is confident it will not have to downgrade the nation's rating because of a default, it maintained that long-term debt and deficit problems will continue to weigh on the AAA mark.
As Republicans and the White House fight over the length of a debt limit increase, Moody's said it would not reaffirm the nation's AAA rating unless there is at least a six-month boost to the debt limit.
However, if the nation were to default for a short period of time, Moody's said it would knock its credit rating down to AA, under the assumption that the default would be quickly rectified and investor losses would be minimized. However, in the "extremely unlikely" situation that investors do lose on Treasury investments, a lower rating could be given.
Logged
