What Would a $3.5 Trillion Budget Bill Look Like?
With the fiscal cliff on the horizon, Congress has to act soon. On December 4, 2019, the Treasury Department will run out of cash to pay its debt, forcing the first default in U.S. history. On that same day, $16.4 billion in Social Security payments are set to go unpaid.
Without the more than $3.5 trillion spending deal passed by Congress this week and signed by President Trump, Congress will run out of money on September 30, 2019. Republicans and Democrats have to figure out a way to avoid defaulting on debt obligations or increasing the debt ceiling again, at least through 2021.
This is the problem: Democrats control the House and Republican control the Senate, but if they can’t agree on anything, everything will go down.
At this point, most know that Democrats and Republicans cannot compromise on everything, so what else can go wrong? Here are some suggestions:
Republicans could delay a vote on the debt ceiling bill until after the midterm elections.
Republicans could offer to accept certain Democratic demands in exchange for dropping the debt ceiling fight.
Republicans could propose a smaller but longer-term debt limit increase.
Democrats could offer to lower their demands.
However, none of these suggestions has been enacted, so it’s still likely a government shutdown would occur, at least at the end of October.
Disclosure: The author owns a few stocks in the Dow Jones Industrial Average.
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