all of its existence, the debt limit has been the subject of repeated
increases — and repeated complaints. Members of congress have sometimes
used it to introduce riders to the floor for an easy vote. They’ve also
opposed raising the debt limit when they want to to gain leverage on
other legislation, like the GOP did in 2013 to demand massive spending cuts.
This standoff resulted in a government shutdown, which resulted in the
suspension of federal borrowing, and consequently, the temporary end to
numerous federal programs.
In introducing this bill, Sponsoring Sen. Harry Reid issued a warning of the dire consequences that would follow if Congress fails to increase the debt limit for the coming year:
we allow the United States to default on its debt for the first time in
our glorious history, it will be a black mark on our reputation, and
that is a gross understatement. There will be a financial disaster, and
it will spark a global recession.”
necessarily as hyperbolic as it sounds. While the government might be
able to flake on some of its bills, failure to make an interest payment
on the national debt would deal a severe blow to the status of U.S. Treasury bonds,
which underpin financial markets around the globe. It’s not a stretch
of the imagination to picture the economic disaster that would follow
this kind of crisis.
Despite all the hullabaloo,
President Obama has mostly put the issue to bed by successfully passing
legislation that will extend the debt ceiling through the spring of 2015. But there’s no guarantee that it won’t be re-kindled as an issue for the 2016 election.
Bill Sponsor Sen. Harry Reid (D-NV) Press Release
Reuters(Photo Credit: Wikimedia Commons)