Shorter-term US debt limit hike is option-source
WASHINGTON, June 30 |
WASHINGTON, June 30 (Reuters) - President Barack Obama and Senate Democratic leaders are discussing a seven-month debt limit increase as one of a few options for dealing with U.S. borrowing authority, a Senate Democratic source said on Thursday.
Other ideas include trying to reach a deal with Republicans that would extend U.S. borrowing authority through 2012 and looking at longer-term spending cuts totaling $4 trillion, according to the source.
There has been deep opposition among House Republicans to doing a debt limit increase that would not cover Treasury Department borrowing through 2012. (Reporting by Richard Cowan)
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Comments (2)
yayayesforsure wrote:
Creating uncertainty is what Republican’s are all about these days. Without it Boehner could not claim that uncertainty is a problem only Republican’s can solve. Got to love those guy’s they really know how to burn the candle at both ends.
mcmchlsmth wrote:
A default would force creditors to mark their U.S. debt holdings to market at a 40 per cent discount (the unfundable portion of the debt in the absence of an increase in the debt ceiling). The damage would be irreversible. Even after new borrowing authority is established, the markets would in future always price in the current “gap” discount, demanding interest rates that would effectively price the U.S. out of all debt markets, not only internationally but even at home. I may be mistaken, but it is my impression that the politicians all seem to believe that this is merely about managing payments, failing to grasp the real and much more grave danger facing the nation if they get this wrong.
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