Two Democratic officials familiar with the talks are saying negotiators will need to reach agreement on raising the national debt limit no later than July 22 so that legislation may be passed in time to stave off a default on U.S. debt.
The officials said the timeline was necessary in order to raise the legal debt ceiling by Aug. 2, the date the Treasury Department projects it will no longer be able to meet U.S. obligations.
This is more false rhetoric by the Democrats and their willing accomplices in the media who do not want spending cuts, despite national debt implications.
The debt limit is the amount the government can borrow to finance its exorbitant spending spree at taxpayer’s expense – those that pay taxes. The U.S. reached its debt limit of $14.3 Trillion dollars in May. The Democrats keep demagoguing the potential default on the debt to maintain the status quo – overspending.
The Obama administration and the mainstream media keep pushing the idea that if the Republicans don’t vote for an increase in the debt ceiling, that the United States could or will default on it’s debt. He has warned that not raising the debt ceiling could produce a spike in interest rates and “severe shock to the economy and the world financial markets.”
One solution put forth by some Republicans and tea partiers would be to simply pay the principal and interest on the debt before paying other federal obligations. Payment of interest on the debt should take priority over all other expensitures.
In fact, if Congress didn’t raise the debt ceiling, the federal government has more than enough money to service the debt and enough revenue left to cover about two-thirds of all government expenditures, including Social Security checks and Medicare.
Treasury Secretary Timothy Geitner has criticized this proposal to prioritize interest payments on the nation’s debt and cut spending rather than raise the borrowing limit.
Geitner, in a letter to Senator Jim DeMint, a South Carolina Republican, said the idea is “a radical and deeply irresponsible departure from previous practices by presidents of both parties.”
If by both parties he means, “double the deficit” Bush and “I can beat that deficit” Obama, then it’s time to depart from previous practices by presidents of both parties!
There would be no reason for the government to default – unless Obama, Geitner’s Treasury Department and the Democrats intentionally refuse to pay the country’s debt obligations to further their political agenda of tax and spend.
This “default on the debt” threat is a tactic promulgated by the Democrats and the Obama administration and their threat will become a self-fulfilling prophecy, if the Obama administration refuses to make the payment on the national debt.