Fiscal Responsibility

Afternoon Roundup: "Debt Ceiling Battle Tab" Edition

A look at the morning news isn’t flattering for House Republicans. Not only did their “confrontation over compromise” approach to raising the debt limit take our nation to the brink of default and result in our nation’s first credit downgrade, but it also cost American taxpayers $1.3 billion in fiscal year 2011 alone:

CNN: Cost of Debt Ceiling Fight: $1.3 billion

Turns out there's a price to pay for incessant fighting in Congress and political grandstanding. The federal government spent an extra $1.3 billion to borrow last year because of the showdown over the debt ceiling, the Government Accountability Office reported Monday.”

Has Congress learned its lesson about the risks of political brinksmanship ? Apparently not.

“For starters, House Speaker John Boehner in May issued the same ultimatum on the debt ceiling that he issued in 2011. He said any debt ceiling increase must be accompanied by an even larger amount of spending cuts.”

Politico: Debt Ceiling Battle Tab: $1 Billion-Plus

Remember that nasty and protracted fight to raise the nation’s debt ceiling last summer? It cost taxpayers a pretty penny: $1.3 billion.”

“That’s how much the government paid to cover additional costs of borrowing money during the epic debt battle that dominated Washington last summer, as investors grew jittery over the delay. That uncertainty led to higher borrowing costs for the federal government, according to a Government Accountability Office report released Monday.”

The Hill: GAO: Debt-Limit Fight Cost Government $1.3B

“The last-minute drama of August's debt-limit fight cost the federal government at least $1.3 billion in increased borrowing costs, according to a new study from the Government Accountability Office (GAO).”

“The government watchdog reported Monday that as markets watched the debt-limit fight, the spread between government debt and private securities narrowed, indicating Treasury debt was being viewed as a riskier investment as the ceiling approached.”

Washington Post: GAO: Debt Ceiling Fight Cost Taxpayers At Least $1.3 Billion

“Economists are still trying to assess the costs of last year’s debt-ceiling crisis—those nerve-wracking months when Republicans refused to raise the limit on U.S. government borrowing unless Congress enacted sharp spending cuts. Eventually, the White House and the GOP came to an agreement and the debt ceiling was raised, but not before making everyone nervous.”

“And now here comes the Government Accountability Office with an estimate of what those jitters cost. According to the GAO, delays in raising the debt limit led to a slight increase in borrowing costs for the United States. That cost the Treasury about $1.3 billion in 2011, and the price tag will expand in the years to come…”

TPM: Government Report: Debt Limit Fight Cost Feds $1.3 Billion And Growing

The fact that the 2011 debt limit fight harmed the U.S. economy in various ways has been well documented, but a new report by a government auditor attempts to quantify one piece of it. Specifically, by walking the country up to the brink of default and spooking creditors and making borrowing more expensive, how much money did Congress cost the federal government?

“The answer? In fiscal year 2011 alone, the debt limit brinksmanship cost the government $1.3 billion, according to a new Government Accountability Office report.”

But these costs aren’t contained to FY 2011.”

“The report does not account for the debt limit fight’s negative impact on consumer confidence and credit, which harmed and delayed the economic recovery.”