Secretary of the Treasury Tim Geithner on Raising U.S. Debt Ceiling

mountainside By mountainside, 11th May 2011 | Follow this author | RSS Feed
Posted in Wikinut>News>Politics

Secretary Tim Geithner spoke regarding what the federal government is doing to prepare, for the possibility of the debt ceiling not being raised by Congress.

Extraordinary Measures to be Taken by U.S. as Debt Ceiling Approaches

As the date of the U. S. Debt Ceiling limit gets closer, Secretary of the Treasury Tim Geithner spoke about what is being done to prepare for the possibility of Congess not raising the limit, so that the United States could continue to borrow money to meet its financial obligations.

Wall Street financiers have expressed concern over the fact that Speaker of the House John Boehner, a key player in this game of chicken, has not said or inferred publicly, that the GOP would vote to raise the debt ceiling. Speaker Boehner said this past Monday that taxes were totally off the table in any negotiation, and after backing away from Medicare changes, it appears that Medicare might now be used as leverage to force the President Obama, to do the GOP's bidding in any negotiation over raising the debt ceiling. The Tea Party is urging Mr. Boehner not to raise the debt ceiling, because if he does, they have threatened to target him in his next election, according to reports.

The Democrats are suggesting that oil subsidies to five of the most profitalbe oil companies cease to receive federal subsidies, because based on the companies bottom lines, they don't really need the subsidies. But the GOP is howling that it would not be something that they would endorse, as that would stife job growth. Really?
That move is said by analysts to save trillions of dollars over a ten year period, and reduce the federal deficit as well. But the GOP would not want to curtail the oil companies contributions to their campaigns to allow for such a thing, now would they?

The U.S. debt ceiling will be hit on May 16, the country would default on
July 8. There were more revenues reportedly taken in during the month of April so there is a liitle leeway in the dates at this time. With the extraordinary steps which Mr, Geithner intends to put in place, the federal government will be able to continue to borrow until August 2, if the ceiling is not raised in time.

Mr. Geithner wrote to the leaders in Congress and informed them that, in essence it appears that Congress will not act by May 16, therefore he finds it necessary for the Treasury Department to begin implementing extraordinary measures. These measures will give Congress more time to act on raising the ceiling. Secretary Geithner warned that while this gives Congress additional time, he cautions strongly against delaying action.

The extraordinary steps Mr. Geithner will put into place include declaring a debt issuance suspension period for the Civil Service Retirement and Disability Fund after May 16; permiting Treasury to redeem existing Treasuries and suspending issuing new ones; also suspending reinvestment of Treasuries held as investments by the Government Securities Fund for the Federal Employees Thrift Plan. Later they would suspend daily reinvestment by the Exchange Stablization Fund.

After the extraordinary measures were exhausted the federal government would stop or delay, Secretary Geithner stated, all military salaries, Social Security payments, Medicare payments, all interest on debt payments and all unemployment benefits. In other words, a almost complete collapse of the federal government system. The Tea Party rules!

Many Republicans and Democrats first want a commitment to rein in spending and cut mounting budget deficits. Senator Kent Conrad, Democrat from North Dakota, said that he was not going to vote for any long-term extension of the debt ceiling, unless there is a credible and serious plan to deal with the debt. He is the Chairman of the Senate Budget Committee. Interestingly enough the debt ceiling was raised seven times during the tenure of President George W. Bush.

If this continues to be a problem, as a fliration with not raising the ceiling, Wall Street could spiral downward, credit markets could go berserk, the U.S. dollar could plummet and the credibility of the United States could take a financial hit that would be devastating. Standard and Poors has already hinted at the possibility of reducing the rating on U. S. Treasuries. This really should not be a game, but should be viewed as a very serious matter, that should be handled like grown-ups who realize what a default on the U.S. debt could do to this country and to world markets.

Tags

August, Debt, Deficit, Dollar, Financial, Geithner, Markets, Plummet

Meet the author

author avatar mountainside
I am an artist, I paint abstract pictures and draw. I like to write, read and watch game shows. I like nice people and love to learn about diffeent cultures. Keeping an open mind is important to me.

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Comments

author avatar Denise O
8th Jun 2011 (#)

I hope they do treat it as adults but, as usual. Both sides just want a fight. Nice read. Thank you for sharing.:)

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author avatar D in The Darling
10th Jul 2011 (#)

The funny thing is, instead of building more schools and hospitals, they borrow that money only to give it away in billions to oppressors, dictators and military regimes like Israel, Egypt etc. Very sad indeed.

Thanks for sharing.

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