In a press conference Tuesday, White House Press Secretary Jay Carney reiterated the sense of urgency being expressed by the Obama administration for Congress to pass a deal that will raise the debt ceiling by Aug. 2. He said, "The United States hit its debt limit in May, and since May the Treasury Secretary ... has exercised all the wiggle room available to him and that runs out on Aug. 2nd."
[See a collection of political cartoons about the budget and deficit.]
His statement came the morning after the president made a nationally televised speech. Obama said that if deal is not reached in time and “we default, we would not have enough money to pay all of our bills—bills that include monthly Social Security checks, veterans’ benefits, and the government contracts we’ve signed with thousands of businesses."
However, many major banks are a little dubious of the administration’s claims about the seriousness of raising the debt ceiling, or at least of its Aug. 2 deadline. Wall Street analysts at Stone & McCarthy Research Associates, Wells Fargo, Barclay's Capital, and UBS report that even if a deal is not passed by Aug. 2, it will be days, if not weeks, until the United States defaults on its loans. They estimate that “wiggle room” may in fact exist which could push the deadline back to anywhere between Aug. 8 to Aug. 15, or even later. Nevertheless, some analysts argue that passing the debt by Aug. 2 would help Washington maintain investor confidence that it can pay its bills.
Some critics are even more skeptical about the Obama administration’s dire warnings about the debt ceiling, citing pure partisan politics in its claims. Argues Peter Roff on Thomas Jefferson Street Blog, "Even though it is now clear that the Aug. 2 deadline is, more than anything, an artificial creation of the Obama administration the president's supporters' efforts to ratchet up the pressure on Congress will go into overdrive."
What do you think? Is Obama exaggerating the urgency of the Aug. 2 debt ceiling deadline for political purposes? Take the poll and post your thoughts below.
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