The debt ceiling deadline is quickly approaching as Democrats and Republicans play the blame game. Meanwhile, Treasury has been using its savings to pay for all of the things the country has already agreed to pay, in a process called ‘extraordinary measures’. Those include items like Social Security payments and Medicare reimbursements.
But that money is going to run out. The Treasury Department estimates it will happen sometime in October.
Congress knows this day is coming. Tuesday, the House passed a bill to suspend the debt ceiling again. However, it doesn’t look like that resolution will pass in the Senate.
Senate Minority Leader Mitch McConnell (R-KY) said his caucus isn’t going to vote for raising the debt ceiling. McConnell said if Democrats want to deal with it, they can put it in that $3.5 trillion spending bill.
Democrats say the debt limit debacle isn’t their doing. Senate Majority Leader Chuck Schumer (D-NY) said Republicans are doing a “dine and dash of historic proportions.” Schumer told reporters both sides have a responsibility to pay America’s debt.
SAN Business Correspondent Simone Del Rosario said this isn’t just a Washington, D.C. problem. Ripple effects from a federal debt default could impact Americans in all walks of life.
New polling from Morning Consult shows twice as many people will blame Democrats if the United States defaults on its debt. However, 42 percent said both parties are to blame.
That polling indicates that McConnell’s gamble might pay off when voters head to the polls.
There are a few other options to pursue, including an unorthodox plan involving the Treasury Department minting new platinum coins.
As interesting as the platinum coin solution might seem, experts have raised some questions on that plan’s legality.
“Officials of both the U.S. Treasury and the Federal Reserve System therefore would have to approve the strategy,” the Congressional Research Service wrote in a 2017 report. “Both the U.S. Treasury and the Federal Reserve, however, rejected such options in 2013,” the report continued.
“Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” a Treasury spokesman said. “The U.S. Treasury again rejected such stratagems in 2015.”