US Treasury urging Congress to move on debt ceiling
United States Treasury Secretary Jack Lew has warned the US Congress that waiting until the last minute to act on raising the nation’s debt ceiling could be detrimental to the economy. The US government has avoided defaulting on any bills by using emergency tactics to save cash. Lew has said that by the middle of October the Treasury will be out of options for borrowing money and have about $50 billion in cash on hand; especially if investors in the government’s debt decide they want to be paid back instead of continually investing. If Congress fails to act, those investors may lose faith in the government and decide to bail instead of reinvesting; which would diminish the cash the treasury has on hand.
Its been reported that the White has said it will not negotiate over the debt ceiling and that Republicans are using it as a bargaining chip in their efforts to reduce the size of the government. Lew said that holding out will do no good; there is no way to tell exactly how much money will come in out of the Treasury between now and the critical point in October.
US House votes to make cuts to food stamps program
The US House has voted for a five percent reduction to the nation’s food stamps program. The cut amounts to about $4 billion and is utilized by 1 in 7 Americans. The House voted 217-210 to approve the measure that will put into place new work requirements for recipients and require drug tests. The bill also targets “able-bodied adults” with out dependents who are currently able to receive benefits indefinitely. There are over 47 million people on food stamps and the cost of the program has doubled in the last five years as more and more people were hit hard by the recession. Should the bill make it past the US Senate, approximately 3.8 million people may lose their benefits in 2014 and about 1.7 million of those fall into the “able-bodied adult” category.
The bill was originally part of a combined bill dealing with farm programs and food stamps. The bill was split so that the farm portion could be passed and the additional negotiations on the food stamps portion could continue. The House will now hold a procedural vote to send both bills to a House and Senate conference to negotiate with the Senate.