Treasury Secretary Timothy Geithner Asks Congress For Another Loan
PAUL KANGAS: Wars, Medicare, bank rescues and stimulus plans — well, it all adds up. The Federal government is in debt to the tune of nearly $12 trillion. Treasury Secretary Timothy Geithner has asked Congress to let him borrow more by raising the Federal debt ceiling again. Lawmakers have already boosted it once this year. And if they don’t do it again, we’ll top the $12.1 trillion cap before the year’s end. As Stephanie Dhue reports, when it comes to paying its bills, the government plays by its own rules.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: If you or I said charge it and we’d maxed out our limit, the credit card company would say, no. When the Federal government does the equivalent — what’s called reaching the debt ceiling — Treasury asks Congress for an increase. Analyst Karen Petrou says what’s different for the government, is it sets its own limit.
KAREN PETROU, FEDERAL FINANCIAL ANALYTICS: The debt ceiling is really a discipline Congress puts on the Treasury Department. Don’t spend more than X. Now it’s an artificial discipline because Congress at the same time will pass a budget that says spend X-plus.
DHUE: With Republican lawmakers already grumbling about bailouts, this fall, Petrou expects a political fight over raising the debt ceiling. And she says stimulus and TARP spending will take center stage.
PETROU: That’s made the budget deficit a real hot potato. And Congress I think this time around is going to toss it around for a while as opposed to just allowing the debt ceiling limit to go up yet again.