What If Congress Doesn't Raise the Debt Ceiling By Aug. 2?

Tuesday, July 26, 2011

In his speech last night, President Obama urged the House and Senate to reach a compromise on a debt plan by August 2. "We can't allow the American people to become collateral damage to Washington's political warfare," he said. Immediately afterward, House Speaker John Boehner gave a live speech responding to Obama, in which he pushed for Obama to sign the Republican plan to raise the debt limit. The Democratic-led Senate and Republican-led House have proposed two vastly different plans. So, what happens if they can’t agree by the deadline? 

John Koskinen served as deputy director for management of the White House Office of Management and Budget between 1994 and 1997. Koskinen was one of the top men in charge when the federal government faced a shutdown in 1995, and talks about how the federal government prepares for a possible default.


John Koskinen

Produced by:

Arwa Gunja

Comments [3]

A question that has been on my mind for some time now! I am all in favor of bringing our troops home now! I back them 100% but not sure that the past 10+ yrs in the middle east have had any more value than our years in VietNam.
Anyways, jobs for returning vets??? some may stay in the service but not all can. Many, hopefully, will return to jobs they left to serve our country. But...many will likely become unemployed. Have not heard any mention of this aspect of bringing our vets home and how it will affect our current rate of unemployment.

How many Nat'l guard/reserve soldiers are currently deployed?
How many have jobs waiting for them when they return?
What are military's(Pentagon's) plan for returning troops? How many will they/can they keep on the payroll?
We need job creation 'big time'.
We, the US, really needs to push/fund alternative energy R&D. Yes, 'funding' means more gov't. money, adding to the debt! but, how can we let China move ahead of us in renewable energy R&D, as recently reported?

Many questions. but mostly surprised that topic of no jobs for majority fo returning vets has been opart of any conversations that I have heard anyways.

Jul. 27 2011 07:52 AM
amalgam from NYC by day, NJ by night

@ listener -

Good revisionist account of the situation.

First of all, there is a good chance that your $21 T estimate won't come to pass because there will be budget reform, now in 2012 and beyond. That's a fact. Moreover, the reason for much of that increase will be do to compound interest. Maybe you've heard of it.

Secondly, and "incredibly," ALL federal elected officials from the time of your hero Ronny Reagan to Obama (less so under Clinton/'94 Rep. Congress) have spent HUGE amounts and largely believed that "deficits don't matter." The largest "reckeless" government spending "in world history" seemed to happen under both Rep. and Dem. presidents due to one of the worst financial/government economic crises "in world history," something that you seem to have forgotten NO ONE wanted, which was averted yet still bogging us down.

You can say three cheers for the Tea Party/Rep. Party for addressing the Federal deficits and debt now rather than later, which would have been forced on the US Federal govt. regardless of anyone's desires to avoid it.

Bully for you and your views, you just can't say it's more than one-sided.

Jul. 26 2011 09:58 AM

Doesn't the real "Hobson's choice" come on August 2, 2021 when the debt of the United States will be about $25 trillion?
Incredibly, the Democrat controlled Congress and White House for two years provided no serious budget plan as they spent more than any government in world history and derided those who protested their recklessness. The debt ceiling and tax increases could have been raised quickly last year but were deliberately put off for purely political reasons.
The Republican Congress which has provided a budget is trying to deal with this crisis in the short and long term by submitting specific economic plans which the Democrats are still not doing. Are the Republicans supposed to join the Democrats in their dereliction of duty, ignore the economic forecasts and just let the United States go bankrupt this century? This kind of political stalemate over a troubled economy is not a curse but a blessing. This is when separation of powers is most necessary and when we should be most grateful for it.

Jul. 26 2011 08:39 AM

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