It appears the time has come again. A high-stakes summit will convene today at the White House as President Barack Obama gathers top lawmakers to try to work their way to an agreement on the US budget. The threat of government shutdowns are looming on the horizon for Friday and, obviously, every attempt is being made to avoid such action.
The Treasury, at this time, has announced that, by May 16, the US will be at its congressionally mandated debt limit. Without extra borrowing authority taken by Congress, the US could default on its debt as early as July 8 at this point. Treasury Secretary Tim Geithner said that the default could unleash a financial crisis that could be even more severe than the one we experienced in 2008.
Time to Act
As Mr. Geithner said, “The longer Congress fails to act, the more we risk that investors here and around the world will lose confidence in our ability to meet our commitments and our obligations.”
Sharp Divisions in Washington
Republican and Democratic divisions are quite sharp at the moment, with so much on the table. The Obama administration, perhaps naively, assumed that increasing the debt limit would be a simple act. Republican lawmakers, however, want to tie such increases to spending caps, deeper spending cuts and other items.They are fighting, as well, over the more urgent issues surrounding funding for the current fiscal year, which ends in September.
Last Ditch Efforts
Today, Obama will convene a group to try to work out these issues. The main negotiators will include John Boehner, the Republican speaker of the House of Representatives and Harry Reid, the Democratic Senate majority leader.Time will tell whether these issues will be resolved quickly, or whether the government is headed for another shutdown.