The political stalemate over the debt ceiling begins in earnest as the Treasury Department maxes out its credit card to honor the country's obligations.
But the White House's insistence that the debt ceiling be lifted through a bipartisan effort is being resisted by House Republicans, who, fresh from a bruising speakership fight, are pressing to slash federal government spending.The Treasury Department reached the $31.4 trillion debt ceiling Thursday morning, with Secretary Janet Yellen introducing extraordinary measures so the country can meet its existing commitments until June.
"He had to negotiate, and in the process of negotiating, we ended up raising the debt limit and putting in a super committee and other things that came along with it," Hoagland told the Washington Examiner of Obama. Instead, Hoagland predicts negotiations will center on discretionary spending, which represents 30% of the budget, as House Speaker Kevin McCarthy seeks to keep promises pledged to detractors concerning leaving spending at 2022 levels. Part of that deal did encompass a reassessment of the budget process and mandatory spending, in addition to not passing"a debt limit increase without a budget agreement or 'commensurate fiscal reforms.
"Sometimes, the political system is a little messy, but you use the mechanisms that you find and that are available," he said."Obviously, we do have to pay our bills, but at the same time, we have to deal with this fiscal situation." "If the markets get very nervous, and the stock market tumbles, that will put pressure on both sides to get a deal," she said."When that happens is hard to know."
Obama administration officials defended the White House's strategy, reiterating that it is Congress’s responsibility to safeguard the country’s fiscal standing. The U.S.'s S&P Global Rating was lowered from AAA to AA+ in 2011, despite the debt ceiling being lifted.
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