Polls show the nation growing impatient. The public wants Washington politicians to get a deal done now to raise the debt ceiling and open the government, and it appears John Boehner is listening. Rushing is a mistake. The urgency of the debt ceiling is exaggerated, while the drastic consequences of a deal that fails to curb spending are being ignored.
Here are three reasons not to rush a settlement:
The U.S. will not default on its debt this week or any time soon
On October 7, Moody’s rating agency circulated a memo on Capitol Hill explaining that “there is no direct connection between the debt limit (actually the exhaustion of the Treasury’s extraordinary measures to raise funds) and a default.” First of all, “there are no interest payments until the end of the month…. Thus, a Treasury based default is not technically possible until that date.”
Secondly, “the government is very likely to prioritize interest payments “ meaning servicing the debt before paying other bills.
Backing up Moody’s analysis, Fitch rating service called default “a low risk.”
Yet Rep. Peter T. King, Republican of New York, said “We’re now backed into a corner. We have to do this by Thursday. We have to make it work, but it’s not going to be perfect.”
No one expects perfection in politics, but Republicans should be fighting to keep the “savings” they gained in 2011, when they capitulated to the largest debt ceiling hike in history.
Breaking the sequester is double dealing at the public’s expense
As the pressure to deal intensifies, Democrats in Congress are demanding a rollback of the “sequester” meaning the mandatory spending cuts over 10 years that President Obama agreed to in 2011 in return for a whopping $2.1 trillion debt ceiling hike.
Obama has used up the $2.1 trillion in borrowing authority he bargained for, and his party wants to renegotiate the mandatory spending cuts in that 2011 agreement.
That’s the way it often happens in Washington DC and it’s why the nation already is facing a $16.7 trillion debt. The borrowing goes on, and the promises of future fiscal restraint are broken.