By Greg Campbell
As America takes a moment to decompress from the most recent fiscal crisis, it bears mentioning that another one will be arriving shortly.
Many Americans are fuming that Congress did not adequately address the important issue of government spending. Without serious reductions in spending, government is bound to continue to amass annual budgetary deficits that top a trillion dollars. These deficits add to our national debt and, unfortunately, our credit card is maxed out.
While Secretary of the Treasury Tim Geithner manipulates America’s funds to create headroom below the debt ceiling of $16.4 trillion, it is only a temporary fix and the looming debt ceiling crisis is coming in the immediate aftermath of the fiscal cliff crisis. The showdown when America no longer has any headroom below the debt ceiling is expected in February.
Republicans folded on their original stance of not raising the debt ceiling in 2011. Now, Obama and the Democrats, emboldened by a recent victory of creating tax hikes, are likely to hold strong as America reaches the end of the “headroom” created and will almost certainly seek a raising or elimination of the debt ceiling.
On January 1st, Obama continued with his menacing and hardline tone to discuss the contentious debt ceiling negotiations. He stated,
“I will not have another debate with this Congress over whether or not they should pay the bills that they’ve already racked up through the laws that they passed.”
However, the debt ceiling limit is a good source of leverage for Republicans who wish to finally rein in government spending. As Congress has not passed a budget in over three consecutive years, it could rightfully be claimed that without budgetary considerations, government has a serious spending problem. With the threat of consequences looming large, Republicans may finally have a way to force Democrats to make concessions to spending cuts and get serious about passing a budget.
“If Congress refuses to give the United States government the ability to pay [its] bills on time, the consequences for the entire global economy would be catastrophic.”
While nobody wishes to see consequences from crashing into the debt ceiling, the fact is that with $16.4 trillion in national debt and a $1.1 trillion deficit, Democrats and Republicans both will eventually need to address the consistent annual deficits.