With only a few working days left until the start of a new fiscal year Oct.1, the U.S. House of Representatives may be burning the midnight oil this week to avert a government shutdown.
Tea Partiers, having taken the de-funding of Obamacare hostage as a condition for the passage of a new budget, leave no clear path toward a resolution of the budget. The House has only this week to resolve issue because it will be in recess again the following week.
If a new budget isn’t passed by Sept. 30, all but the most essential government offices will go dark on Oct. 1.
Also facing Congress is the need to raise the debt ceiling in the next few weeks. Raising the debt ceiling would allow the government to continue paying its bills, but there is strong public sentiment against it.
The debt ceiling involves only money previously spent — it has no link to future spending — but fiscal hawks and a confused public seem to think that not raising the debt ceiling would allow lawmakers to rein in future spending.
In 2011, with Congress at a similar impasse over raising the U.S. debt ceiling, the American credit rating was downgraded for the first time in history.
A low credit score makes household borrowing more difficult and expensive. Similarly, not raising the American debt ceiling could make borrowing more difficult and more expensive because it would make investments seem riskier and more prone to default.