Republicans eye U.S.debt limit

[eddie21]

A temporary extension of the debt ceiling expired on Friday, forcing the U.S. Treasury Department to resort to extraordinary accounting measures to ensure that it can continue to borrow to pay federal obligations.

In a letter to congressional leaders, U.S. Treasury Secretary Jack Lew said these measures would last only about three weeks.

By February 27 when they are exhausted, the government could only pay its bills from incoming revenue and cash on hand.

"Any foreseeable cash balance would be exhausted quickly," Lew warned in the letter.

"I'm confident that the United States is not going to default on its debt and we will resolve the need to increase the borrowing authority of this country prior to any deadline that the Treasury issues," Cantor said on Thursday on the House floor.

So we're is the money coming from?

[ScaryMary]

Dinar Revalue of course!!!!....it's happening on the 26th... La-la...la-la HA

[Benjamin NutnYahoo]

Sounds like more typical Gov. BS. from useless a-holes that don't know how to do anything right except line there own pockets at others expense.

[dontlop]

The govt takes out a loan and deposits it at the federal reserve

The fed deposits that into its asset column

The. The fed can use digital banking to issue 10 times that amount and loans it out to banks and charges interest

The credit card company's borrow it up and send out credit card applications with zero interest for 6 months

The kids jump on them and max out the credit cards then 6 months later they start collecting 19 % interest

And then the govt takes out another loan and deposits it and the fed deposits it in the asset column and they loan out the money and the credit card company's send out credit card applications for zero interest rates for 6 months and the kids jump on them and pay off the old credit cards and then they owe even more

Then the kids are grown up and learn about bankruptcy laws and file bankruptsy and the banks write off the losses

And it never stops

They offer tax incentives to married people with kids

To keep the new baby's coming to absorb the debt

Naw they can't do that

[Muleslayer]

Michelle canceled another vacation.

She's doing her part!

[Butifldrm]

Treasury Secretary Sends Warning on Debt Limit

By JONATHAN WEISMAN

JAN. 22, 2014

 

WASHINGTON — Treasury Secretary Jacob J. Lew warned Congress on Wednesday that the government would most likely exhaust its ability to borrow in late February, setting up yet another fiscal showdown with Republicans, and this time earlier than congressional leaders had anticipated.

In a letter to Speaker John A. Boehner and the other top three congressional leaders, Mr. Lew said a surge of February spending, mainly tax refunds for 2013, would leave the Treasury with little room to maneuver after the official debt limit is reached on Feb. 7.

The letter amounts to an early alarm bell, coming just weeks after Congress passed its first bipartisan budget and comprehensive spending bill in years. Those bills were supposed to serve as a cease-fire in the budget wars that have rattled the country and the economy since Republicans took control of the House in 2011.

But they left untouched the debt limit, which has been a rallying cry for conservatives for three years. As recently as last week, Senator Harry Reid of Nevada, the majority leader, said the debt ceiling fight could be put off until as late as May while the Treasury shuffled government accounts to meet its obligations.

With his letter, Mr. Lew sought to end such speculation. Unlike past debt ceiling fights, this one is coming at a time of year when Treasury payments soar, leaving him little “headroom” to put off the fight. Last February, government spending reached $230 billion, compared with $45 billion in other months. This year will be worse, because the government shutdown delayed the start of tax season and will concentrate refund payments.

“Protecting the full faith and credit of the United States is the responsibility of Congress, because only Congress can extend the nation’s borrowing authority,” Mr. Lew wrote. “No Congress in our history has failed to meet that responsibility. I respectfully urge Congress to provide certainty and stability to the economy and financial markets by acting to raise the debt limit before Feb. 7, 2014, and certainly before late February.”

Michael Steel, a spokesman for Mr. Boehner, reiterated that the speaker does not want to get “even close” to a default on the United States debt. But, he added, a “clean” increase in the debt limit without some concessions to Republicans “simply won’t pass in the House.”

Mr. Boehner said last week, “I would hope that the House and Senate would act quickly on a bill to increase the debt limit.” But aides signaled they would need some face-saving measure to placate House conservatives who still want to force concessions from the White House, possibly on controlling the growth of entitlement programs like Medicare or easing the path to an overhaul of the tax code.

President Obama continues to say he will not negotiate over the debt limit, which he said is a congressional responsibility, not a bargaining chip. Republicans were infuriated by that stand during the 16-day government shutdown in October. But they acquiesced, reopening the government and suspending the debt ceiling until Feb. 7. Senior congressional Democrats are pushing the White House to maintain its no-negotiating stance.

“With the bipartisan agreements on the budget and on funding the government for this year, we have an opportunity to move past the manufactured crises and work together on real challenges,”  said Senator Patty Murray of Washington, the chairwoman of the Senate Budget Committee. “I hope Republicans will listen to Secretary Lew and join Democrats to ensure the U.S. pays its bills on time with no strings attached.”

House Republicans will gather next week for their annual planning retreat. That will kick off efforts to resolve an impasse on the debt ceiling.

 

http://www.nytimes.com/2014/01/23/us/politics/treasury-secretary-sends-warning-on-debt-limit.html?_r=0

Debt Ceiling Drama: Will You Get Your Tax Refund on Time?

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ROB GARVER

The Fiscal Times

February 4, 2014

This month, the Internal Revenue Service will start sending out income tax refunds totaling hundreds of billions of dollars. But it doesn’t have to. And there is a real argument that if there is any possibility that the Treasury might be unable to pay the nation’s bills by mid-March or sooner, it shouldn’t.

On Monday, Treasury Secretary Jack Lew once again warned Congress that it needs to act quickly to raise the country’s borrowing limit or risk a catastrophic default – but he’s not discussing publicly the option that could buy him extra time, though it would almost certainly create an epic political firestorm.

Related: Business Groups Warn GOP to Drop Debt Ceiling Battle

A little-understood fact about the tax code is that there is no statutory requirement that the Treasury pay out tax refunds by a specific date. The tax code’s only deadline related to refunds relates to interest payments. It requires that if the government holds off paying refunds until 45 days after the filing deadline, it must start paying interest on the money from that day forward. That means that Treasury is under no legal obligation to pay out tax refunds before May 31 – and even that isn’t a deadline, but simply when interest starts to accrue.

In practice, Treasury has made a point of sending tax refund payments out pretty quickly. Many checks and electronic funds transfers go out within days of a return being filed. This is good politics, because nobody likes the idea of the government holding onto money it owes taxpayers. And it’s good economics, as the refunds are a potent economic stimulus. But it may be bad fiscal management for a Treasury Secretary concerned about imminent default.

 

In remarks delivered at the Bipartisan Policy Center on Monday morning, Lew reminded the audience that the federal debt limit has been suspended through February 7, after which Treasury will be unable to borrow any more money. By deferring certain payments and taking other so-called “extraordinary measures,” Lew estimated that the Treasury will be able to continue meeting the country’s obligations for at least a few more weeks.

But after that, he said “we will be left with only the cash we have on hand and any incoming revenues to meet our country’s commitments.  Notably, we expect our outlays over the coming weeks to exceed our net inflows—largely due to the payment of tax refunds—so we will draw down our cash balance faster than at other times of the year.  Without borrowing authority, at some point very soon, it would not be possible to meet all of the obligations of the federal government.”

Related: Did Debt Ceiling Fever Break, or Go Into Remission?

So, why would Lew make all those tax payments if he doesn’t have to?

Think of it this way: Nobody would pay their electric bill three months in advance if it meant defaulting on their mortgage this month. Secretary Lew may find himself in a similar position if the debt limit is not raised soon. If Congress were to take the country to the brink of disaster once again and miscalculate on the timing of a final deal – as President Obama publicly fretted during the debt limit crisis of 2011 – Treasury might find itself unable to make a required payment, placing the country in default.

Were that to happen, Lew could face some very difficult questions. Among them: Why did you pay out tax refunds months before you had to, leaving no money to pay obligations coming due much sooner?

The amount of money involved is not trivial. In a letter to House Speaker John Boehneron January 22, Lew pointed out that because of tax refund payments, Treasury’s outlays in February 2013 were $230 billion, compared to an average $45 billion for the other months of the year.

Related: Mitch McConnell Hints at Another Debt Ceiling Showdown

Lew was asked on CNBC last month whether Treasury had considered delaying refund payments to protect the country against possible default, and dodged the question, saying only that the Treasury had never taken that action in the past.

“That's something we've never -- we have not done,” he told host Becky Quick, without actually addressing whether it was an option being considered.

To be sure, delaying tax refund payments would be a monumentally hard sell politically. Many taxpayers count on those payments, using them as a sort of forced-savings account and plan major expenditures around them. Republicans would, no doubt, pounce on such a move.

Experts also warn that, short of shutting down the entire tax return-processing system, it might be logistically impossible to stop refund payments from going out. Treasury’s computer systems are designed to process many payments automatically, especially for electronically-filed tax returns.

But if the choice Lew faces is between making default even a little less likely at the cost of political fallout, and being accused of failing in his fiduciary duty to the United States, it may be no choice at all.

http://www.youtube.com/watch?feature=player_detailpage&v=_hYoZdMKLcM

- See more at: http://www.thefiscaltimes.com/Articles/2014/02/04/Debt-Ceiling-Drama-Will-You-Get-Your-Tax-Refund-Time#sthash.mfbNei75.dpuf

Edited February 10, 2014 by Butifldrm

[R2D2]

A question for all those that possesses more knowledge than I. At what point will we see stagflation with the worthless paper that is being distributed to the (we) little people?        

[DinarDiva007]

Wonder how much longer we have before the dollar crashes? COME ON RV!!!! I need to get the hell out of dodge!

[SgtFuryUSCZ]

***///

 

wonder if their filthy little plan to connect the IRS to the UNaffordableLACKofCare Act has

 

been their plan all along.... make it impossible for The People to "legally' qualify so $billions$ are

 

raked in by the IRS in penalties, thus fattening the coffers --- and all so hobummer can say he

 

"BUILT THAT". 

[skeetdog]

Thanks eddie21...I didn't get my refund until August last year...I think the IRS is already part of the ''UnaffordableLACKofCare Act'' as SgtFuryUSCZ so elegantly put it....R2D2 are you talkin' bout the Dollar or the Dinar???....DD007 I'm with ya, can't wait to spur my 'Mule' and ride out as fast as.... I can                 

[SgtFuryUSCZ]

***///

 

Hope your mule has his sea legs, SKEET,

on accounta we're draggin' ya down n' across The Gulf to the bush with us to 'OlSarge's Fish Camp !

[R2D2]

SKEET, I was referring to the worthless American dollar.

[skeetdog]

Yep, got my sea legs in the USCG Sgt...and can't wait to catch up with yall to kick around some good times...Thanks for clearin' that one up R2d2, appreciate it....