Treasury Secretary Timothy Geithner's announcement Wednesday that the United States would run up against its authorized debt limit this Monday caught some of us off guard.
A paper we read by the Congressional Research Service titled "The Debt Limit: History and Recent Increases" said most experts believed the current debt limit would tide the country over until February or March 2013.
This paper was just written last May 22.
What seems obvious is that the U.S. is going through money a lot quicker than the government is taking it in.
Since August of 2011, the debt ceiling has been increased three times by a total of $2.1 trillion. These increases were authorized - sort of - by the Budget Control Act of 2011.
That act set in motion what is now termed the "fiscal cliff," because it called for cuts in spending and increases of revenue totaling at least the $2.1 trillion increase in the debt ceiling. Those spending cuts/increased revenues were required to be accomplished in the budgets for fiscal years 2013-2021. If Congress and the president cannot agree on cuts or revenue increases by next Tuesday, a set of default cuts and tax increases kicks in.
Thus, the cliff.
It is obvious now that no comprehensive solution will be found before Jan. 1. A series of patches will undoubtedly be passed to ward off the cuts and tax increases.
But Geithner's Wednesday announcement should stir Congress into serious action. Operating at a deficit of over $1 trillion per year can be sustained only for a brief period.
The Budget Control Act called for setting up a Joint Select Committee on Deficit Reduction. Where is that committee's recommendations?
The clock is ticking and the deficit can has reached the end of the road the government has been kicking it down.
* Editorials reflect the opinion of the publisher.