Economy

REPORT: Debt Limit Fight Cost Government $1.3 Billion In 2011

CREDIT:

Republican opposition to raising the debt ceiling increased the government’s borrowing costs by $1.3 billion in fiscal year 2011, and costs will continue to rise in the future, a report from the Government Accountability Office found. The U.S. Treasury was forced to take varying actions to avoid hitting the debt limit before Congress raised it in August, forcing borrowing costs higher on multiple Treasury securities, the report found. And because many of those securities “will remain outstanding for years to come,” the borrowing costs will continue to rise in the near future. The debt limit fight also caused the first-ever downgrade of America’s credit rating, which Standard & Poor’s blamed on Republican unwillingness to raise taxes as part of a debt reduction deal.