The US Appears to Be Over the Debt Limit Already. What’s Going On?

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by Mish Shedlock, Mish Talk:

According to the Debt Clock, the US is already well over the debt limit and has been since January.

The above chart is from the US Debt Clock. It updates every second, in real time. If you have not yet seen seen the Debt Clock, it’s a fascinating look.

What’s Going On?

The debt clock is not really inaccurate. It assumes all bills have been paid.

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The US went over the debt ceiling in January, but Treasury Secretary Janet Yellen has not paid all the bills.

She has been using “extraordinary measures” such as not making regularly scheduled contributions to the federal employment retirement fund.

X-Date

The X-Date is the date after which the US defaults on interest payments or fails to send out Social Security checks.

Estimates range on the X-date from early June to later in July.

The X-date is uncertain because it depends on tax filing receipts.

In particular, the IRS ruled California storm victims qualify for tax relief; April 18 deadline, other dates extended to May 15

Tuesday Meeting Flop

On Tuesday, President Biden met with House Speaker Kevin McCarthy, Senate Majority Leader Chuck Schumer, and Senate Minority Leader Mitch McConnell, and House Minority Leader Hakeem Jeffries to discuss the debt ceiling.

The meeting was a big flop as predicted in this corner.

Biden insists on a clean lift of the debt ceiling and McCarthy insists on doing something about massive deficit spending as part of the lift.

Another Meeting Friday

CNN reports Biden to meet with congressional leadership again on Friday as threat of national debt default looms

The president said he “made it clear” during the meeting “that default is not an option,” adding that he’s “absolutely certain” the US can avoid defaulting on its obligations because an “overwhelming number of members of … Congress know it would be a disaster.”

“I would hope that he’d be willing to negotiate for the next two weeks so we could actually solve this problem and not take America on the brink,” McCarthy said outside the West Wing following the meeting.

The California Republican said he asked the president for areas where he’d engage on spending reductions, but “he wouldn’t give me any.”

However, McCarthy would not offer concrete assurances about preventing default.

“I’m speaker of the House,” he said. “I’m not the leader of the Senate. I’m not the president … I’ve done everything in my power to make sure it will not default. We have passed a bill that raised the debt limit. Now, I haven’t seen that in the Senate.”

“So,” the speaker continued, “I don’t know.”

“There isn’t a single bright line or ‘must have’ that I am married to,” South Dakota GOP Rep. Dusty Johnson, a key McCarthy ally, told CNN. “The totality of the deal has to make real and substantial change to how our country spends and borrows. There are lots of different ways to get there.”

McConnell – known as a Senate deal maker with stronger ties to Biden than McCarthy – has signaled that he won’t come to rescue Democrats in negotiations.

“The solution to this problem lies with two people, the president United States, who can sign a bill and deliver the members of his party to vote for it, and the Speaker of the House,” McConnell told reporters after Tuesday’s meeting. “There is no sentiment in the Senate – certainly not 60 votes – for a clean debt ceiling. So there must be an agreement and the sooner the president and the speaker can reach an agreement, the sooner we can solve the problem.”

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