Posted January 10, 2013
"Neither man ever accepted the $2.8 trillion in fresh cuts and taxes, on top of those agreed to in 2011, that it would take to stabilize the debt at 69 percent of the economy by 2022, according to estimates by a Bipartisan Policy Center task force."
”This is the difference between a debt-ceiling shutdown and a government shutdown. As Shai Akabas, a research at the Bipartisan Policy Center, puts it, “in a government shutdown, the government is shutting down future obligations. With the debt ceiling, They’ve already obligated the money. They owe these people the payments now, and they can’t make them.”
“Also, a debt ceiling alarm bell from the Bipartisan Policy Center saying that the Treasury Department is going to run out of room on the debt ceiling earlier than we thought, February 15, they say is the X-Date when we can’t pay all of our bills, when we literally, on that date, have $9 billion coming in, and we have $52 billion in bills.”
“Fasten your seat belts, folks. The “extraordinary measures” the Treasury Department is using to keep the United States from crashing through its $16.4 trillion debt ceiling could run out as early as Feb. 15. That’s in 38 days. This comes courtesy of the Bipartisan Policy Center (BPC), which released a revised “debt limit analysis” yesterday.”
“Now onto our top story, a debt ceiling disaster. It could be coming sooner than expected. A new report by the Bipartisan Policy Center says that without Congressional action the U.S. will smash into its borrowing limit, as early as mid-February. So are we doomed to default? Or will law makers get the ball rolling and solve this crisis?”
“The Center's analysis points toward the latter part of that two-week period as when such measures would be exhausted and the government would be forced to choose among which of its bills to pay. Because of the volume of bills scheduled to become due during that period, the window is unlikely to extend beyond March 1.”
“Based on financial data from Treasury, we estimate that the government will be unable to pay all of its bills as early as Feb. 15,” Steve Bell, senior director of the economic policy project at the Washington-based Bipartisan Policy Center, said in an e-mailed statement today. “We have less time to solve this problem than many realize.”
"A presentation from the Bipartisan Policy Center did a good job of looking at what we'd have to give up if we prioritized crucial things like interest payments, Social Security and defense."
“This time, crossing the debt-ceiling threshold is not going to be the nonstop, freewheeling fun of the 2011 incident concerning exactly the same thing. Reuters reports: “The Bipartisan Policy Center said the Treasury has fewer tools now to stave off a default than it did in the summer of 2011, when battles over raising the debt ceiling pushed the United States to the brink of default and hit its credit rating.” Fast approaching, fewer options—got it.”
“The failure of President Barack Obama and congressional lawmakers to reach a comprehensive solution to the fiscal cliff has set the stage for another fight next month to avoid the rest of the mandatory spending cuts and to raise the nation’s debt limit. The deadline to increase the nation’s borrowing cap may be as soon as February 15, according to the Bipartisan Policy Center.”
“What happens then? The only honest answer is: Nobody has any idea. It is the moment the Bipartisan Policy Center calls the X Date: The first day the U.S. government doesn't have the money it needs to pay all of its bills. The United States has never hit the X Date. Hopefully, we never will. But here's what we know about what would happen on day one in Default America.”
“But the Bipartisan Policy Center, a Washington-based think-tank, said the Treasury may run out of funds between February 15 and March 1, based on an analysis of the government's daily and monthly cash flows.”
BPC on Twitter
Economic Policy Project