U.S. Hits Debt Ceiling
Today the United States exhausted its borrowing authority and the Treasury Department will now implement its “extraordinary measures” to prevent a default on the national debt. Treasury Secretary Jack Lew has been urging Congress to increase the nation’s borrowing authority since the Department will soon deplete the available cash to pay the nation’s bills by the end of the month. The Bipartisan Policy Center estimates that the federal government could completely run out of funds by mid-March.
In a recent speech delivered at a Bipartisan Policy Center meeting, Secretary Lew discussed the risk posed by further delaying the increase and he also noted that some of the “extraordinary measures” which have been used in previous stalemates are no longer available or have limited use. “It is imperative that Congress move right away to increase our borrowing authority. It would be a mistake to wait until the eleventh hour to get it done” he said.
Despite Secretary Lew’s calls to increase the debt ceiling without delay, members of Congress have not taken immediate action. According to various news outlets, leading members in the Republican party would like to see some compromise from the Obama Administration and Democrats in return for increasing the debt limit.
Debt limit brinksmanship occurred recently during the October 2013 federal government shutdown. Numerous Congressional members fiercely contested an increase on the nation’s borrowing authority, which raised serious concerns that the United States could have defaulted on its obligations for the first time in history. Jack Lew stated then that “If Congress fails to meet its responsibility, it could deeply damage financial markets, the ongoing economic recovery, and the jobs and savings of millions of Americans.” Eventually the debt ceiling was raised under the Bipartisan Budget Act, which extended the nation’s borrowing authority till February.
According to recent news reports, House Republicans are moving toward introducing a bill that would lift the debt limit until the first quarter of 2015. NAHMA would like to see a bipartisan solution develop that does not jeopardize the US economy or lower its credit rating.
A previous debt ceiling stalemate from 2011 shook up markets and eventually caused a downgrade of the United States’ credit rating for the first time in our nation’s history. According to the credit rating agency Standard & Poor’s, “the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.”
To view Secretary Lew’s speech before the Bipartisan Policy Center, please follow
this link.
Senate Passes Farm Bill
On Tuesday, February 4, the Senate passed H.R. 2642, the Agricultural Act of 2014, also known as the Farm Bill. The final vote record was 68 to 32.
The main focus of the Farm Bill is centered on agriculture activities and food assistance programs for struggling Americans. Housing programs under Rural Development are not affected by this legislation, but the bill does make changes to the definition of what constitutes a “rural” area, which may increase access to housing programs for low-income families living in underserved locations.
Currently, the population cap for an area to be considered rural is 25,000 and the USDA certifies this through use of census data from the year 2000. Under H.R. 2642, the population limit used to define areas as rural will increase to 35,000, and the USDA will include Census data from 2010 for more recent information. Qualified areas will be given guaranteed program eligibility and retain their rural status through 2020 as well. This expansion on the population limit and usage of 2010 Census data has been previously proposed under Senator Tim Johnson’s bill, S. 766, and under another unsuccessful Senate bill, the Agricultural Reform, Food, and Jobs Act of 2013 (S.954).
H.R. 2642 has been presented to the President who is expected to sign the bill into law.
