At noon on Friday, the Treasury Department began the latest round of accounting contortionism brought on by Republicans’ refusal to raise the debt ceiling. CNN Money explains that a financing mechanism to aid state and local governments will be the first casualty:
The debt ceiling clock is about to start running again. The U.S. Treasury on Friday will begin using “extraordinary measures” to keep the country from defaulting on its obligations. […]
It’s unclear how much time the extraordinary measures will buy, but Treasury Secretary Jacob Lew said last week the measures could last “at least” through Labor Day. Other estimates put the drop-dead date for raising the debt ceiling at sometime in October or even November.
The first move that Treasury will take is to temporarily stop issuing special securities to state and local governments as of noon on Friday.
Treasury calls these maneuvers “extraordinary measures,” but they have become routine since the GOP began dabbling in debt ceiling brinkmanship in the summer of 2011. That fight ended the precedent of legislators raising the ceiling as necessary for the past 50 years, including seven times under President George W. Bush. The GOP’s 2011 maneuver led Standard & Poor’s to downgrade its rating of U.S. debt for the first time in the nation’s history, but that didn’t stop Republicans from labeling the nation’s creditworthiness “a hostage worth ransoming.”
That attitude persists in 2013, as Senate Minority Leader Mitch McConnell (R-KY) indicated in March. Even with the deficit shrinking so rapidly that the Congressional Budget Office can hardly keep up, and with Republicans’ dire claims about debt levels hampering economic growth proven wrong, the GOP is reportedly mulling over what ransom to seek this year. After successfully extracting fiscal concessions in the past, however, its focus is sliding from spending toward conservative red meat.
At a House GOP meeting this week to decide what to demand, the Washington Post’s Lori Montgomery reports that proposals included tying the nation’s credit rating to the Keystone XL pipeline or the repeal of Obamacare, and that “at least one person wanted to take on late-term abortion.”