The Free Press, Mankato, MN

State, national news

January 13, 2013

Debt ceiling options all poor

WASHINGTON — In the summer of 2011, when a debt crisis like the current one loomed, President Barack Obama warned Republicans that older Americans might not get their Social Security checks unless there was a deal to raise the nation’s borrowing limit.

After weeks of brinkmanship, Republicans consented and Obama agreed to a deficit-reduction plan the GOP wanted. Crisis averted, for a time.

Now that there’s a fresh showdown, the possibility of Social Security cuts —and more — is back on the table.

The government could run out of cash to pay all its bills in full as early as Feb. 15, according to one authoritative estimate, and congressional Republicans want significant spending cuts in exchange for raising the borrowing limit. Obama, forced to negotiate an increase in 2011, has pledged not to negotiate again.

Without an agreement, every option facing his administration would be unprecedented.

It would require a degree of financial creativity that could test the law, perhaps even the Constitution.

It could shortchange Social Security recipients and other people, including veteran and the poor, who rely on government programs.

It could force the Treasury to contemplate selling government assets, a step considered but rejected in 2011. In short, the Treasury would have to create its own form of triage, creating a priority list of its most crucial obligations, from interest payments to debtors to benefits to vulnerable Americans.

“It may be that somewhere down the line someone will challenge what the administration did in that moment, but in the moment, who’s going to stop them?” asked Douglas Holtz-Eakin, a former director of the Congressional Budget Office. “I pray we never have to find out how imaginative they are.”

In such a debt crisis, the president would have to decide what laws he wants to break. Does he breach the borrowing limit without a congressional OK? Does he ignore spending commitments required by law?

Text Only | Photo Reprints
State, national news
  • 1 hurt in fiery Twin Cities interstate crash ROSEVILLE, Minn. (AP) — Authorities say one person was hurt in a fiery crash involving four vehicles on a Twin Cities interstate. The crash on Interstate 35 brought morning traffic to a halt during a rainy commute. The Minnesota State Patrol says a

    July 25, 2014

  • Black box found at Air Algerie wreckage site PARIS (AP) — French soldiers recovered a black box from the Air Algerie wreckage site in a desolate region of restive northern Mali on Friday, officials said. Terrorism hasn't been ruled out as a cause, although officials say the most likely reason f

    July 25, 2014

  • Ukraine reports overnight rebel attacks on border MOSCOW (AP) — The Ukrainian army on Friday claimed that soldiers came under artillery fire from the Russian side of the border overnight and were attacked by rebels in several other places in the restive east. Ukrainian forces are trying to close in

    July 25, 2014

  • Deal still elusive for Gaza cease-fire CAIRO (AP) — Turbulent negotiations to broker a temporary truce in the Gaza Strip are continuing against the backdrop of fresh Israeli attacks on Palestinian militants. U.S. Secretary of State John Kerry met twice Friday in Cairo with U.N. chief Ban

    July 25, 2014

  • Transcript shows concerns during Arizona execution FLORENCE, Ariz. (AP) — U.S. District Judge Neil V. Wake was attending a ceremony for a judicial colleague when he received an urgent — and unusual — request: Lawyers for a condemned inmate wanted him to stop an execution that didn't seem to be workin

    July 25, 2014

  • Sniper-Author-Ventura [Duplicate] Day 3 of deliberations ends in Ventura lawsuit Jury has deliberated 19 hours

    July 24, 2014 1 Photo

  • Man accused of stealing from group HASTINGS (AP) — An Apple Valley man is charged with five counts of theft for allegedly stealing more than $113,000 from a Rosemount youth athletics group. Sixty-two-year-old Robert Steven Reischauer was the former finance manager of the Rosemount Ar

    July 24, 2014

  • Sanders offers lower-cost bill to reform VA Bill would allow vets to go to private doctors

    July 24, 2014

  • Wetland Loss [Duplicate] Report says Prairie Pothole region losing wetlands BISMARCK, N.D. (AP) — Federal officials and conservationists say a recent report detailing wetland losses in the five-state Prairie Pothole Region over the past decade highlights the need for increased protection for the region that provides breeding

    July 24, 2014 2 Photos

  • France: Air Algerie flight vanishes over N Mali ALGIERS, Algeria (AP) — An Air Algerie flight carrying 116 people from Burkina Faso to Algeria's capital disappeared from radar early Thursday over northern Mali, the plane's owner and a French government official said. Air navigation services lost

    July 24, 2014