WASHINGTON — The government is within days of hitting its legal borrowing limit, complicating the negotiations between the White House and House Speaker John Boehner, R-Ohio.
According to the Treasury Department, the government is about $66 billion below its $16.4 trillion debt ceiling, a legal borrowing limit that is set and periodically raised by Congress. When the country hits the ceiling — sometime toward the end of December, analysts estimate — it would start a countdown clock that would end with Washington's running out of money to pay its bills.
That would be an unprecedented event that might hobble the government, ruin the country's credit and send markets into an outright panic, analysts predict. But despite — or because of — the debt ceiling's potential to disrupt the economy, members of Congress are using it as a potent political football to extract concessions from the other side.
"I will not raise the debt ceiling ever again until we get significant entitlement reforms because if we don't reform entitlements, we're going to become Greece," Sen. Lindsey Graham, R-S.C., said on CNN this week.
The White House has pushed back by warning Republicans away from the ceiling in strong terms. "We cannot play this game because while it might be satisfying to those with highly partisan and ideological agendas, it's not satisfying to the American people and is punishing to the American economy," said Jay Carney, the White House spokesman, this week.
Some Democrats have in recent weeks urged the White House to mount a legal challenge to the ceiling itself. The White House has ruled out such measures. But in its initial proposal to avert the worst of the year-end tax increases and spending cuts, the so-called "fiscal cliff," the Obama administration asked Congress to grant it more authority over the ceiling.
The White House's plan would allow it to request an increase to the debt limit. Congress could pass a resolution blocking the increase, though such a resolution could be killed with a presidential veto. Republicans immediately rejected the proposal.