After avoiding the government shutdown crisis on Friday by trimming $38 billion from the 2010 baseline budget there is a new crisis on the horizon. This problem is that of the debt ceiling crisis. Passing an increase on the federal debt limit will have to be done to avoid defaulting on internet payment on the national debt. This battle is going to be not over billions but a trillion dollars.
Right now the federal debt limit is $14.294 trillion. To avoid the debt ceiling crisis and keep the government functioning this ceiling must be raised quite a bit by May 16. If this does not happen “catastrophic” consequences will result. This information came from Treasury Secretary Tim Geithner.
Tim Geithner said that this week’s financial crisis was “modest” in comparison to what is coming down the road. If Congress doesn’t take action a number of government programs will be halted, limited or delayed. Many people do not believe this could be true but this is going to put such things as military pay, retirement benefits, Medicare payment and Social Security, interest on the debt as well as unemployment benefits and tax refunds. I am sure that the Congress will see that the right thing to do is to raise the debt ceiling.