It's All Politics
Tue January 22, 2013
Debt Limit? What Debt Limit?
House Republican leaders intended to put off the debt ceiling fight for three months. But could they accidentally be giving the Obama White House carte blanche to borrow like crazy through mid-May?
Key here is the language used to raise the existing $16 trillion debt ceiling. Instead of increasing it by a set dollar figure, the House bill simply suspends the debt ceiling law (the one that says how much the federal government can borrow) until May 19. And on May 19, it increases the debt ceiling by the amount the government has borrowed between the date the law is passed and midnight, May 18.
Here is the wording that defines what counts toward that retroactive debt ceiling increase:
"An obligation shall not be taken into account under paragraph (1) unless the issuance of such obligation was necessary to fund a commitment incurred by the Federal Government that required payment before May 19, 2013."
Hmmm. Any wiggle room there? Who's to say what "necessary" means in that sentence? The Obama administration? If so, maybe Treasury will find it "necessary" to authorize a couple trillion in bonds this spring — sort of nail down a home equity credit line to get through January 2017?
If this bill proves to have some legs, we shouldn't be too surprised if that language doesn't get tweaked by Republicans before it gets sent along to the president.