The clock is ticking. The $14.3 trillion debt ceiling must be raised or the economy courts catastrophe. At least, that is what the chairman of the Federal Reserve Board, the Treasury Secretary, the Business Roundtable, the U.S. Chamber of Commerce, the National Association of Manufacturers, and a host of other Very Responsible Parties say.
Yet politicians on both sides of the aisle are hunkered down for what could turn into a market-rattling game of brinksmanship.
No vote on raising the debt ceiling unless trillions, not billions, of dollars are taken out of the next ten-year budget plan, says House Speaker John Boehner (R-Ohio). We want a clean bill on the debt ceiling, insist liberals in the House and Senate, meaning no linkage to spending cuts. We’re open to compromise, but certain things – like a radical overhaul of Medicare – are off the table, says the Obama administration.
How likely is it that politicians will agree to a long-term budget plan in the next few weeks? Not very. With both sides gearing up for a make-or-break 2012 presidential election, there’s zero political incentive right now for either side to sign on to legislation that compromises core principles like No New Taxes or Leave Medicare Alone.
So if you’re looking for a scorecard to evaluate the political posturing around the coming debt ceiling vote (can anyone here say “adult conversation”?), The Fiscal Times offers these Five Ugly Truths against which any debt reduction linkage to the debt-ceiling vote should be measured.
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