Secretary of the Treasury Timothy Geithner has warned Congress that the statutory debt limit could be reached by the end of March. As of last week, total debt outstanding that is subject to the limit was $13.95 trillion, approximately $335 billion below the limit.
Increasing the debt limit is necessary to maintain the full faith and credit of the U.S. government. Delaying action and risking default would be irresponsible and could negatively impact financial markets.
However, the need to raise the limit provides an opportunity to assess past decisions; the debate over the last increase prompted President Obama to create a bipartisan fiscal commission. He and Congress should use the current situation to develop a realistic plan to put the country on a sustainable fiscal path.