Dems Propose Temporary Debt Ceiling Increase

President Obama and the Democrats are trying to cut a deal for a temporary increase of the debt ceiling.

(Reuters) - President Barack Obama and Senate Democrats are weighing a scaled-back U.S. budget deal that would avert a looming default but force Congress to tackle the politically toxic issue again before the 2012 elections, a Senate Democratic aide told Reuters on Thursday.

The deal would cover the country's borrowing needs for seven months, the aide said. That would theoretically include budget savings of roughly $1 trillion to attract the Republican support needed to pass it through Congress.

At this point in time, this seems to be the most likely to happen option.

The Republicans know that their positions are wildly unpopular, but they have backed themselves into a corner by repeatedly pledging to cut spending and never raise taxes.

A temporary increase would provide both parties with a way out of their fox-holes, of which the GOP's is much deeper, and I wouldn't be shocked to see a temporary increase again in another seven months since that will be right in the middle of the Republican primary season.

It remain's to be seen if the proposed $1 trillion in cuts would be over a span of five or ten years, and what revenue increases would accompany it, but a temporary increase with minimal side effects would surly be preferable to a paralyzing credit freeze which would push the country back into recession for years or maybe even the rest of this decade.

Because the Republicans have control over the House of Representatives, and with it the power to make demands and block legislation, we're going to feel pain either way this goes. The question is how much pain.

  • dildenusa

    “A temporary increase would provide both parties with a way out of their fox-holes, of which the GOP’s is much deeper,”

    There’s a saying that there are no atheists in a foxhole. I’m sure the republican clowns are praying much more loudly since they have much more distance to cover to get GOD to hear than do the democrats.

  • mrbrink

    The Kitchen Table Conversation

    Spouse #1: Yeah, honey. Um, I took the family credit card and bought a trillion dollars worth of fireworks, a bunch of yachts, jets, and some high end pharmaceuticals.

    Spouse #2: Well, our credit rating is great, so we’ll just have to up our limit a little.

    Spouse #1: No, we’re going to stop payment on the credit card and file bankruptcy.

    Spouse #2: We don’t have to do that, our credit is in good standing.

    Spouse #1: Well, I’ve also been giving our life savings to my friends who live in the mansion down the street, and they told me to declare bankruptcy.

    Spouse #2: Well, your friends are misleading you, so maybe we should stop giving them our money.

    Spouse #1: I don’t want to do that, I want to stop paying on the credit card.

    Spouse #2: But we’ll lose our house and ruin our credit.

    Spouse #1: So be it.

    Spouse #2: So be it…?!

    Spouse #1: Yep.

    Spouse #2: Well, maybe we can stop paying for my mother’s health insurance, the kids’ health insurance and college fund, and dip into our retirement fund, but your friends are going to have to find their own way. We haven’t even fixed the leaking roof and plumbing, yet.

    Spouse #1: Yes. Yes. Yes. Yes. No. And, I also burned down some things with the fireworks that we’ll have to pay for.

    Spouse #2: What do you mean Yes, yes, yes, yes, no?

    Spouse #1: I need my friends to like me and without me they wouldn’t be able to go to the track for free, or play black jack for free, and I won’t be treated with respect at the country club anymore.

    Spouse #2: That’s ridiculous!

    Spouse #1: Well you’ve been spending money, too!

    Spouse #2: Yeah, on healthcare for our parents and kids, and their education!

    Spouse#1: Well, that’s spending, isn’t it?

    Spouse#2: Okay, well then maybe we’ll just start getting our water from the river, our medicine from prayer, and our food from the dumpster, but we’re gonna have to cut your friends off.

    Spouse#1: Yes, yes, yes, no. I’m leaving you for my friends, so the bills are your problem, now.

    Spouse#2: Wait, let’s talk about this.

    Spouse #1: I’m through talking about my friends. Leave them out of this. This is your problem, now.

    Spouse#2: But we’ll have to move, and we’ll be living on the street, picking through dumpsters. I cannot find work because your friends aren’t hiring unless I start… turning tricks for them.

    Spouse#1: You should do that. If you need me I’ll be at the club.

    Spouse #2: Wait, I need you to sign these papers saying we are no longer operating a joint account.

    Spouse #1: Nope. I hate you. I’ve always hated you. It’ll make my day seeing you suffer and die in the street. Just don’t do it near the club. I have to keep up appearances.

    • IrishGrrrl

      Awesome MrBrink! FTW

  • muselet

    A short-term increase in the debt ceiling might not be the worst of all possible worlds, but it is a pretty terrible idea. The Rs would get another shot at destroying the social safety net, the same stale argument would be repeated in the heat of campaign season (at much higher volume and with much more venom), and markets would still panic and send the US economy back into recession.

    I fervently hope the Ds aren’t stupid enough to go through with this. Of course, I also fervently hope the Rs realize they are this far *holds fingers approximately three angstroms apart* from destroying the entire world economy with their shenanigans, and that one’s not going to come true, either.


    • dildenusa

      Really? I don’t think Mitch McConnell knows what an angstron is. But the republicans are backed up to a wall within about 3 angstroms of the wall and if they don’t compromise they just might prove Max Planck correct and quantum mechanically vibrate right through the wall to the other side of the universe. Wouldn’t that be great?

      • muselet

        That is a wonderful thought. (And you’re right, McConnell wouldn’t know an angstrom from an airplane.)