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Monday, April 11, 2011

Congress Moves On To Battle Over Debt Ceiling

The US Capitol. (AP)

The US Capitol. (AP)

The federal government is open for business today thanks to the budget agreement worked out late last week. But as the details are sorted out, Republicans and Democrats are rushing to the next battleground in the budget wars — the debt ceiling.

That’s the cap on federal spending set by Congress which limits how much the government can borrow. The White House says that failing to raise the debt ceiling would result in an “unthinkable disaster.” But Republican leaders say they want to see major steps toward reducing long-term debt before they sign off.

New York Times Treasury Department reporter Binyamin Appelbaum explains how the debt ceiling works and what’s at stake in the debate.

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  • Bob

    Question to Robin’s guests: Can’t the Federal Reserve simply buy up a large amount of the outstanding Treasury debt with the stroke of the keyboard (i.e. print some new money)? This would ‘retire’ some existing debt with the newly-created money, which would free up the U.S. Treasury to issue new Treasury debt without hitting the current ceiling? The Fed went wild over the last 2 years doing this for the banks, effectively doubling its own balance sheet in the process.

  • Tpiatt

    The crushing debt in this country is due to five decades of military spending, not “entitlements” , or social programs, or the cost of NPR and Public Television. Eisenhower warned us. The cancerous deficits started 30 years ago when Reagan started printing money for the wasteland of military spending. When Carter left office the cost of our military (adjusted for inflation to 2009 dollars) was approximately $575 Billion; when Reagan left office the annual cost was $830 Billion; today the annual cost is $1.3 Trillion. (source Wikipedia “Military budget of the United State”) During those 30 years if the military had reduced its demand by a mere $100 billion per year the national debt would be $3 trillion less today. In the last 10-years, had we kept Clinton’s military budget we would have saved the country $6-trillion. So why in your interview, did you only talk about cutting the things that make our lives healthier and happier? In the future please push the “business writer” from the New York Times. Don’t just follow the talking points that have lead this country into its current bankruptcy. Military-Industrial spending is the elephant in the room – that should be the talking point.

  • Jh3449

    Deborah Becker raised the issue of Socail Security being part of the cause of the federal deficit. It is not. SS revenues don’t go into the government general revenues and SS benefits aren’t paid out of federal revenues. It is not part of the budget and it is not part of the budget deficit. People who want to see the end of SS love to try to sneak it into the deficit discussion to give their agenda legitimacy.

  • Nrcbtm1

    Isn’t it simple arithmetic? The government is spending more than it is collecting in fees and taxes, so it has to borrow the balance. Congress just approved continuing for the next 6 months to spend more than it collects. To stay under the current debt ceiling for the remainder of FY 2011 it would need to totally eliminate the 2011 deficit. No one in Congress is willing to do that, not even the Tea Party. So the Tea Party threat to not raise the debt ceiling is just an irresponsible bluff that can do nothing but hurt the U.S. by making our creditors leery of lending us money. The rest of Congress should ignore that threat (call their bluff) while concentrating on the FY 2012 budget.

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Robin Young and Jeremy Hobson host Here & Now, a live two-hour production of NPR and WBUR Boston.

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