US Economy: Obscure clause may help avert default
The US government reached its debt limit of $14.29 trillion in May
WASHINGTON:
The White House could resort to a little-known line in the US constitution to prevent a disastrous default if Congress does not agree to raise the debt ceiling by August 2, experts say. The 143-year-old clause, written to address still-potent divisions after the bloody Civil War, has been dredged up by legal scholars as well as the US Treasury secretary to suggest how a debt debacle might be avoided. The US government reached its debt limit of $14.29 trillion in May and since then the Treasury has used special measures to allow the government to keep paying its bills. Unless the limit is raised by August 2, the Treasury says, growing spending and debt service commitments will force a default.
Published in The Express Tribune, July 10th, 2011.
The White House could resort to a little-known line in the US constitution to prevent a disastrous default if Congress does not agree to raise the debt ceiling by August 2, experts say. The 143-year-old clause, written to address still-potent divisions after the bloody Civil War, has been dredged up by legal scholars as well as the US Treasury secretary to suggest how a debt debacle might be avoided. The US government reached its debt limit of $14.29 trillion in May and since then the Treasury has used special measures to allow the government to keep paying its bills. Unless the limit is raised by August 2, the Treasury says, growing spending and debt service commitments will force a default.
Published in The Express Tribune, July 10th, 2011.