When Congress returns to Washington they aren't going to have time to settle in before they need to get to work; the United States is going to hit the debt limit and no longer be able to borrow money in mid-October if a deal is not reached, according to the Washington Post.
The federal government will not have the funds necessary to pay for Social Security or the salaries of federal employees, including the military, if action is not taken. The fight over budgets and debt limit has been a point of contention between Republican lawmakers and the Obama administration since 2009.
Republican lawmakers are expected to dig in their heels and demand that spending be cut in exchange for agreeing to raise the debt limit, with their number one target for cutting being the Affordable Care Act. President Barack Obama has said that he will not negotiate over the debt limit, according to the Washington Post.
Raising the debt limit does not increase the amount of money that Congress will spend, instead it allows the government to borrow money in order to pay the bills they have already approved. Treasury Secretary Jacob Lew has warned that if the debt limit isn't raised that the United States could be in danger of defaulting, according to the Los Angeles Times.
"Protecting the full faith and credit of the United States is the responsibility of Congress because only Congress can extend the nation's borrowing authority," Lew wrote in a letter to House and Senate leaders. "Failure to meet that responsibility would cause irreparable harm to the American economy."
The government has actually already hit the debt limit, technically that happened in May. Thanks to a payment from Fannie Mae and Freddie Mac of close to $60 billion to repay money received in their bailout the government was able to keep going for a while longer, according to the Los Angeles Times.
When the government hits the debt limit the treasury will still have $50 billion left over. Steve Bell, the economic policy director at the Bipartisan Policy Center, told the Washington Post that lawmakers shouldn't think they can drag their feet because of the money left over, it could be gone in a few days.
"We think the $50 billion cash balance indicates that Lew is right to raise the borrowing authority before mid-October," Bell said. "People may think it's a big number, but these intergovernmental transfers that are paid every month to Social Security and Medicare are as big as $30 billion in one day."
