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Monday
Mar282011

US Debt Crisis: Can Congress Reach a Solution?

Stephen Chernin/Getty Images(WASHINGTON) -- As Congress turns its attention to the budget and the country's fiscal situation, the debt ceiling debate that has been simmering underneath the surface could come to a boil in the near future.

The Treasury Department estimates the United States will reach its debt limit between April 15 and May 31.  Administration officials are ringing alarm bells and warning of dire consequences if the $14.3 trillion ceiling isn't raised.

But Republican lawmakers say they won't commit to such a move until President Obama takes bold steps in tackling entitlement programs like Medicare, Medicaid and Social Security that are weighing down the country's pocketbook.

"Republicans in the Senate will not be voting to raise the debt ceiling unless we do something significant about the debt," Senate Minority Leader Mitch McConnell, R-Ky., said earlier this month.  "I don't think he has to lay out in public exactly what he's willing to do, but we need to begin serious discussions, and time's a wasting."

Senate Republicans reportedly are working on a Balanced Budget Amendment, a Constitutional amendment that would require a balanced budget every year, as a condition to raising the debt ceiling.

While the debate over the debt limit and budget is taking place far from the purview of most Americans, its repercussions can be significant.

Raising the debt limit doesn't mean the federal government will be allowed to spend more.  Rather, it's a tool to allow Treasury to make payments to vendors under the budget passed by Congress.

If the debt ceiling is not raised, the Treasury may not be able to make payments to agencies, which could result in delayed Social Security and Medicare checks.  The Treasury has mechanisms in place that could delay the negative ripple effects for some time, and experts say the two parties are likely to come to a resolution before that tipping point is reached.

Copyright 2011 ABC News Radio

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