Congress purchased a two week extension in the battle over the 2011 budget on March 2. Hopefully Congress and the White House will be able to work out their deep differences and avoid a shutdown of the Federal Government before the clock runs out on March 18th.. (See my previous posts here and here).
Unfortunately, even if a budget for 2011 gets agreed upon, there is another, potentially more damaging, spending fight just around the corner. Its the battle over the debt ceiling.
The Federal debt ceiling establishes the total amount of money the US Government can borrow. It is set by Congress. It is currently set at $14.3 trillion. The US is approximately one month from reaching that level of borrowing. In order to avoid hitting the debt ceiling, approximately $768 billion dollars of spending would have to be eliminated in 2011. More spending cuts would need to be made in 2012.
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