Another Trillion in Debt

The President notified the Congress that he needed some more pocket change to keep the federal government running, to the tune of $1.2 trillion. Under the terms of the misbegotten deal that was struck last August, the President is authorized this last raising of the debt ceiling unless Congress can override a veto that would certainly come if they disapprove.

The deal turned out badly, for many reasons. The Super-Committee failed, and automatic cuts are supposed to kick in, but not until October 2012. Elections are going to intervene before any real change is effected, hence the failure. In hindsight, enabling a super-committee was a bad move tactically and constitutionally. I am sorry I thought it might work to reduce the debt. Deals to continue the payroll tax holiday only make another debt ceiling crisis right before the election more likely.

Speaking of elections, here is the most interesting question. Did the administration miscalculate? Might the debt ceiling actually come into play prior to the November elections, rather than in 2013, as previously predicted? The current limit is $15.194 trillion, which was reached rather quickly, it seems. If the debt ceiling becomes a problem prior to the election, what will the administration do? Here is a hint.

A Treasury Department document shared on Tuesday said that if the limit is reached before the elections, the government could take “extraordinary measures to extend borrowing authority beyond the next elections.” But the department offered no detail.

Because, as Dean often states, Constitutional Republics, are like, hard. I think the political fall out from the Treasury taking such action would be bad for Obama, so he might be forced to grandstand on the issue and take this to the Congress. It would give him an opportunity to run against Congress, instead of the Republican nominee. I hope Boehner is thinking this one through, but I am worried.

The winners of next November's elections will face very tough decisions; we are running out of room to maneuver. That makes these elections the most important in our lifetime.