Your savings account may be fine, but there’s no telling what’s headed your way if Congress fails to raise the federal debt ceiling, Congress’ unofficial budgetary oasis, before it expires on 31 December. The national debt, that can be anywhere from about $19 trillion to about $23 trillion depending on whom you ask, needs to be increased by $290 billion to $300 billion. It’s just a question of how much is enough?
Investors already are nervously awaiting the inevitable funding crisis in January when a so-called “real deal” for the expiring GOP tax law — what people will classify as actual money — will need to be at least delayed by how many days the deadline passes. But while it would still fall under the debt ceiling, it’s hardly a walk-over.
No longer Zero Sum Game
The Congressional Budget Office has estimated that the Treasury would still be required to dip into the Social Security trust fund, still necessary during times of higher-than-anticipated debt, to cover certain spending obligations. That move, in the past, has hurt retirees in a big way.
It also undermines Social Security disability benefits, which has always been a safe harbor for those on the margin. Debt ceiling discussion is a definite red flag to those on the dole.
That all sorts of things could come to a screeching halt, of course, is all anyone can realistically have for now. The bitter clashes over debt ceiling that seemed to stymie the Obama administration, and still arise from time to time in the Trump administration, are less about the virtue of keeping the federal coffers full and more about the relative size of the budget the federal government borrows money from.
President Obama’s White House issued the Debt Ceiling Ceiling Line of Defense. The red number printed on it when the debt ceiling was last raised in 2011 led to his public stress on the point.
President Trump’s White House, however, introduced the Debt Ceiling Madness Label as a new standard of sorts, causing added tension and efforts to hash out a compromise with Congress. It’s something that elected officials must keep in mind.