CBO – Federal Debt and the Statutory Limit – MARCH 2015

Opinion: Patricia L Johnson

The Temporary Debt Limit Extension Act, Public Law 113-83, went into effect in February of 2014 and suspended the debt ceiling until March 15, 2015.

What is the Debt Limit? The definition from Treasury follows:

“The debt limit is the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments. The debt limit does not authorize new spending commitments. It simply allows the government to finance existing legal obligations that Congresses and presidents of both parties have made in the past.”

If you have a good memory you will recall that Congress could not agree on raising the debt ceiling back in 2011 which is one of the reasons the long term credit rating of the United States was lowered on August 5, 2011 from AAA to AA+, where it still remains to this day.

What must be remembered about our debt limit is the fact that it does not authorize new spending, it only authorizes spending for obligations that have already been approved so there should never be any reason not to increase the limit, yet the debt limit has been constantly challenged by the Republicans during President Obama’s presidency.

The Congressional Budget Office prepared a report on the debt limit for Congress, as requested, which may be viewed at the following link:

http://www.cbo.gov/sites/default/files/cbofiles/attachments/49961-DebtLimit.pdf

The debt limit issue has the potential of turning into another nightmare that we need to head off at the pass. Please contact your Member of Congress to express your views on the subject.

© 2015 Patricia L Johnson

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