As the U.S. comes within a week of hitting the nation’s debt limit nations across the world are beginning to show their anger over the situation.
“What is chilling is that US politicians are willing to engage in a game of brinkmanship that is tantamount to detonating a nuclear device over their economy,” writes the Times of India.
UAE Businessman Khalaf Ahmad Al-Habtoor wrote in the The Arab Times: “”There is something fundamentally wrong with a system that leaves a country without direction, in stagnation, without a budget and potentially without the wherewithal to settle its debts.”
If the U.S. were to default on October 17th, it would have a crushing impact on nations that use the U.S. Dollar as their official currency. The dollar would plummet on the world markets and so third world nations like Zimbabwe who use the dollar will see their country’s overall market power and value dive.
While most world leaders are publicly stating that they believe the U.S. will find a way to raise their debt ceiling and get the nation’s economy moving again, according to multiple news reports privately they’re getting concerned.
House Republican leaders are planning to offer a temporary increase in the nation’s debt ceiling in return for President Obama entering into negotiations for what the lawmakers describe as “pressing problems.”
However, the Republican lawmakers did not offer an end to the government shutdown.
“What we want to do is offer the president today the ability to move a temporary increase in the debt ceiling,” House Speaker John Boehner told reporters after a meeting of House Republicans. He called the deal “good-faith effort on our part to move halfway to what he’s demanded in order to have these conversations begin.”
The deal would extend suspend the debt limit until the Friday before Thanksgiving and creates what economists call a “Hard X date” meaning no “extraordinary measures” can be used by the Treasury Secretary to extend his borrowing authority past that date.
Insiders say the move was aimed to calm the stock markets and the plan seems to be working at stocks were up in early trading.
The head of Veterans Affairs has said he will be holding the checks of veterans and millions of others if the budget impasse is not resolved by November 1st.
Secretary of Veterans Affairs Eric Shinseki said he withhold more than 5.18 million checks worth around $6.25 billion on November 1st. Shinseki told the House Veterans Affairs Committee he wouldn’t be able to pay beneficiaries without a budget.
He said that payments would stop for 364,000 survivors getting special benefits, 500,000 vets and spouses would stop getting pension payments and GI Bill programs will stop for another 500,000 people.
The House of Representatives passed a bill last week to fund the VA but the Senate has not considered the bill.
The Pentagon is entering into an agreement with a private foundation to ensure families of fallen troops are paid survivor benefits that were suspended because of the government shutdown, the U.S. Secretary of Defense said Wednesday.
The government will reimburse the Fisher House Foundation once the shutdown is over, Defense Secretary Chuck Hagel said in a written statement.
“I am offended, outraged, and embarrassed that the government shutdown had prevented the Department of Defense from fulfilling this most sacred responsibility in a timely manner,” Hagel said.
“In the days before the shutdown, we warned Congress and the American people that DoD would not have the legal authority to make these payments during a lapse in appropriations.”
The announcement came just after the U.S. House of Representatives voted unanimously to resume paying survivor benefits, which includes a $100,000 payment.
Source: CNN – CNN: Pentagon strikes deal with charity to pay military death benefits
Republicans and Democrats in Congress saw signs of hope on Wednesday for a break in their fiscal impasse, as members of both parties floated the possibility of a short-term increase in the debt limit to allow time for broader negotiations on the budget.
The slight shift in tone was aided by a column by House Budget Committee Chairman Paul Ryan of Wisconsin, who urged a negotiated end to the stalemate but did not mention Republican demands for linking changes in the federal healthcare law with government funding.
“Right now, we need to find common ground,” Ryan, the party’s 2012 vice presidential nominee who had been largely silent in the confrontation, wrote in the Wall Street Journal.
“We need to open the federal government. We need to pay our bills today – and make sure we can pay our bills tomorrow. So let’s negotiate an agreement to make modest reforms to entitlement programs and the tax code,” he said.
Source: Reuters – Reuters: Members of Congress see signs of hope in fiscal impasse
Secretary of Veterans Affairs Eric Shinseki issued a dire warning Wednesday about the impact of a prolonged budget impasse, saying millions would see their benefit checks halted if the stalemate is not resolved in the coming weeks.
Shinseki said more than 5.18 million checks worth $6.25 billion could soon be held up.
“I will not be able to pay all these beneficiaries (without a budget),” Shinseki testified before the House Veterans Affairs Committee.
He said that if something is not done by Nov. 1, “I will not be sending checks out.”
Source: FOX News – FOX News: VA chief issues dire warning, says millions of veterans might not get payments
The Pentagon told FoxNews Tuesday that as long as the government is shut down they would be stopping death benefits to the families of troops killed in combat.
“Unfortunately, as a result of the shutdown, we do not have the legal authority to make death gratuity payments at this time,” Lt. Cmdr. Nate Christensen, a Defense Department spokesman, told Fox. “However, we are keeping a close eye on those survivors who have lost loved ones serving in the Department of Defense.”
House Speaker John Boehner said that the House of Representatives would be holding a vote Wednesday to restore funding for the payments.
“I think it’s disgraceful that they’re withholding these benefits,” Boehner said.
Five troops died over the weekend in Afghanistan. Four of the bodies will be returned to Dover Air Force base Wednesday. However, the families of the dead will have to pay their own travel to Dover because the Pentagon says they can’t pay those bills. The Defense Department usually pays for that travel and for transporting the family and remains to home states for private funerals.
With a partial government shutdown now in its eighth day, President Obama took questions from reporters at the White House this afternoon.
The president’s appearance comes with no end in sight to the shutdown and the deadline looming for Congress to raise the debt ceiling or risk the first-ever U.S. government default.
Earlier Tuesday, Obama spoke briefly with House Speaker John Boehner, but no apparent progress was made in their talk. Obama underscored that he’s won’t negotiate with Republicans until after the threat of government shutdown and default have been removed, according to the White House.
Source: USA Today – USA Today: Obama says he’s open to short-term budget to end impasse
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The biggest foreign creditor of the United States is telling the U.S. Congress it needs to get the debt ceiling impasse resolved before the country reaches default. Continue reading →
