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William Byrnes (Texas A&M) tax & compliance articles

Debt Deal Talks Down to the Wire

Posted by William Byrnes on March 23, 2012

Treasury Secretary Tim Geithner insists that the administration needs to reach a debt limit deal by the end of this week to give Congress enough time to enact the deal into law. Without a deal, the federal government will be unable to pay its debts as of August 2 of this year.

“Default is not an option,” he said on Tuesday, July 12, at the Treasury’s Women in Finance Symposium. “Failure is not an option, and they understand that—Speaker [John] Boehner and Minority Leader [Mitch] McConnell—absolutely understand we need to move in advance of the deadline on Aug. 2nd.”

Despite Geithner’s confidence that they will reach a deal, President Obama and Congressional leaders are also working on options for keeping the government’s bills paid if a deal can’t be reached by the Treasury’s August 2 debt limit deadline. “If we are unable to come together, we think it’s extremely important that the country reassure the markets that default is not an option and reassure Social Security recipients and families of military veterans that default is not an option,” said Mitch McConnell (R-K.Y.), who took part in the talks.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage in  Advisor’s Journal, see Democrats Call Debt Limit Unconstitutional (CC 11-134), Debt Limit Standoff Boils Over (CC 11-115) and Storm Clouds over U.S. Debt (CC 11-85).

One Response to “Debt Deal Talks Down to the Wire”

  1. While this is certainly an interesting topic, does anyone really believe the U.S could ever default on its loans (ever is a strong term, but near future may be more appropriate)? While the Greece default went through smoothly and triggered the CDS contracts as intended, a U.S. default would send shockwaves through the world economy significantly greater than that of the financial crisis. As inept as our Government may be at times, they are fully aware of this and would not allow this to happen.


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