JPANet: Raise the Debt Ceiling & Protect our Communities

In the midst of our severe, prolonged economic downturn, the federal government is borrowing money to pay its bills and meet its obligations. By law, Congress sets the limit (ceiling) on the amount of money the government may borrow. If it is to continue to function, Congress must increase the government’s debt limit before August 2.

American GirlRaising the debt ceiling is essentially a book-keeping task. It does not change federal spending. At this time, the budget for the federal government is set through the end of September, 2011. In the coming months, Congress will pass a budget for the next fiscal year, October, 2011, through September, 2012. Raising the debt ceiling does not affect these budgets, increase spending, or change the size of the deficit. 

Some members of Congress are refusing to support an increase in the debt limit except as part of a package that includes huge spending cuts. These reductions in spending, if they follow the pattern established in the House of Representatives’ recent budget proposal, would target programs for low- and moderate-income people and essential government functions. The cuts would further harm people who are already suffering and prolong (and possibly worsen) the economic downturn.

Any conditions that are attached to an increase in the debt ceiling should target reductions in the deficit, not just cuts in government spending. Shrinking the deficit must be done through both spending cuts and tax increases on wealthy households and corporations. Tax increases as well as spending cuts must be part of any effort to reduce the deficit.

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