paul ryan mitch mcconnell

Congress has 12 working days to raise the nation’s debt ceiling when it returns in September.
Failure ot raise the debt limit would cause severe economic and political consequences.
Negotiations have been sluggish, with one Democratic aide saying there are currently “no talks” ongoing.

Congress, in the midst of a month-long August recess, faces a massive policy threat when lawmakers return to Washington next month.

By the end of September, Congress must approve legislation to raise the nation’s debt ceiling — or risk a goal economy disaster. And it already sounds like the attempts at a compromise aren’t going well.

The Treasury Department says the debt ceiling, a statutory limit of outstanding debt obligations that the federal government can hold, must be raised by September 29. That gives Congress 12 working days to pass legislation to get to President Donald Trump’s desk.

The Congressional Budget Office puts the deadline slightly later in mid-October.

If breached, it could lead to disastrous consequences for the federal government, the US economy, and the global financial system. If the debt ceiling is not raised, the federal government would lose the ability to pay bills it already owes in the form of US Treasury bills and could lead the US to default on some of that debt.

The possible fallout from a default, according to a study by the Treasury Department, would include a meltdown in the stock and bond markets, a downgrade of the US’s credit rating, which would increase the government’s borrowing costs, and the undermining of the full faith and credit of the country.

Despite potentially dire consequences, there is confidence but no guarantee that factions in Congress, with a variety of competing interests, will be able to come together on a deal to raise the limit.

Currently, the two sides do not appear to be close on a deal.

“There are no talks going on right now,” one senior Democratic congressional aide told Business Insider.

Despite this, there is hope that the two sides will be able to avoid the worst case scenario.

“I think we will avoid a default,” one Republican aide told Business Insider. “I think we might have one attempt that fails and then we have to come back and do something else.”

A similar sentiment was expressed by outside analysts and economists.

“We think most policymakers are aware of the severe political and economic consequences of a failure to raise the debt limit. But September could be an …read more

Source:: Business Insider

Congress has 12 working days to avoid an economic disaster — and there’s good reason to panic

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