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Debt talks: Parties start to break a sweat

by Adam Russett on July 27, 2011

It was easy to ignore the inflated rhetoric of politicians who warned about coming to a budget agreement. For decades, there has been no argument about raising the debt limit to keep the country from defaulting. In fact, one of the presidents who raised the ceiling the most in recent history was Ronald Reagon, who is often championed by Republicans as an ideal conservative. The fact is that Reagan and each president after him knew that raising the debt ceiling was required legislation. 

But now, the most recent round of arguments about the debt limit has revealed just how partisan Washington has become. In just one week, some sort of bill has to be passed or the country could default.

"The debt limit, or ceiling, which is the amount that the nation is allowed to borrow, must be raised if the United States is to pay for all the things that Congress has already bought: the spending in the budget bills it has already passed, the Social Security checks promised to retirees, the payments due to private companies with federal contracts and the interest on bonds it has sold," The New York Times reports.

So if officials don't meet the deadline or refuse to raise the ceiling, which has been suggested by everyone from Michele Bachmann to Donald Trump, then that means almost everyone who relies on public spending will be affected. Essentially, Congress has already borrowed money for some of these things, because Washington insiders took it for granted that the limit would be raised again.

"It would be bad to default, both because it would raise borrowing costs for the federal government and because a lot of the financial sector is built on the presumption that Treasury always pays off," Donald Marron, the director of the Tax Policy Center, explained to The Chicago Tribune

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