Congress must act sometime in April or May to raise the amount of money the government can borrow to maintain its solvency, but Republican leaders in the House and Senate - particularly newly-empowered fiscal conservatives who swept into office with tea party support - say they will withhold their votes to force major cuts in the federal budget.
No one is really sure what would happen, however, if the debt limit wasn’t raised; some believe it could well cause a panic in financial markets, while others say a federal shutdown is possible, though budget experts say that the government probably has the emergency power to continue operating at least temporarily.
“I can’t wait for the bloodbath in April,” Simpson said, relishing the prospect of political turmoil. “When debt limit time comes, they’re going to look around and say, ‘What in the hell do we do now? We’ve got guys who will not approve the debt limit extension unless we give ‘em a piece of meat, real meat” in the form of spending cuts.
“And boy, the bloodbath will be extraordinary,” he said.
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