The Senate is also set to vote on a balanced budget amendment next week, but the vote is expected to fail. Though the measure is supported by all 47 Republicans, who say that a hike in the debt ceiling is not possible without it, it would need 23 Democratic votes to avoid a filibuster, which is unlikely.
Congress is under intense pressure to resolve the issue by Aug. 2, when the US Treasury estimates that the nation will need to borrow more money to cover its spending. After meeting with Senate Democrats on Thursday, Treasury Secretary Timothy Geithner told reporters: “We’ve looked at all options, and we have no way to give Congress more time.”
House Republicans devoted much of a closed caucus meeting on Friday to talk over whether, in fact, the US will default on its debt after Aug. 2. Some conservatives, including GOP presidential primary contenders, have charged that President Obama is bluffing and that the Treasury has enough ongoing tax revenues. Others say the Treasury could simply prioritize payments after Aug. 2, or dip into the Social Security Trust Fund.
But the PowerPoint presentation by the Bipartisan Policy Center at Friday’s GOP meeting signals that there are few viable options and that the US has “no secret bag of tricks to finance government operations past Aug. 2.”
“Treasury has been very clear about what it will and won’t do,” says Jay Powell, former undersecretary of the Treasury with the first Bush administration, now a scholar at the Bipartisan Policy Center in Washington, who addressed the closed House caucus meeting on Friday.