Debt Limit Update: Sky Still Not Falling
Reuters reports that the Treasury Department has re-vamped its plans for debt issuance, extending the amount of time before America hits its statutory debt limit. In January, Treasury Secretary Geithner said we would reach the debt limit as soon as March 31. Now, Assistant Secretary Mary Miller says the debt limit may not be reached until May 31.
At that point, despite some claims, America will not default. In fact, Congress could direct the Treasury Department to bring spending into line with receipts, while prioritizing debt service, as Heritage Senior Fellow J.D. Foster outlined in his definitive backgrounder on the debt limit policy.
Conclusion: the approaching debt limit is not the crisis that the federal spending addicts hysterically claim.