White House: There Is No Debt Ceiling “Plan B”, Failure To Hike It Will Be A Total Catastrophe

Barack Obama

[credit provider=”The White House”]

Technically, the US has already hit its debt ceiling, and the world hasn’t collapsed yet, and there’s obviously a growing concern among Democrats that because of this, it won’t be a big deal when we hit it again on August 2.The White House is eager to push back against this idea that if there’s no lift to the ceiling at this point, then all will be fine.

From Ben White at POLITICO’s Morning Money:

WHITE HOUSE WARNS – Senior administration officials offered a pen-and-pad briefing (no cameras) at the White House stressing that there is no “Plan B” if the limit is not raised in August. “There is no plan that can preserve our credit rating. There really is no alternative to raising the debt limit. It has to be raised before the deadline … well in advance of the deadline.” The officials went through the risks of bank failures, soaring interest rates, a collapsing dollar etc. …

At some point this issue of Geithner cutting other discretionary spending has to be acknowledged, since it certainly appears — from our understanding of GAO rules — that there is actually a Plan B.

Still, the fact that we’re having this conversation at all — of a self-induced crisis — is pretty mindblowing.