Summary: We are encroaching upon brinkmanship as of September 2013. Opposing political sides are at a crossroad as to how to handle the debt ceiling and how it should be raised – with or without additional spending cuts.debt ceiling

Brinkmanship is defined as the practice of pushing dangerous events to the verge or brink of disaster in order to achieve the most advantageous outcomes. This term was used also during the Cold War, so this term is not used lightly. Basically, it comes down to a game of chicken. Who will back down first and is there any middle ground in which a compromise could be proposed and accepted? Brinkmanship generally involves an exchange of threats from the opposing sides which escalate to the point that one side is forced to give in to as the consequences become too great and or unbearable.

We are a month away from again reaching the debt ceiling. Congress is adjourning for the summer and then will have 9 days once they return to make final decisions regarding the debt ceiling. The debt ceiling allows the government to borrow money to pay its bills. Our nation was faced with this crisis in 2011 and again in May 2013. As a result of these issues, our nation’s bond ratings were downgraded which substantially affects the ability for our country to borrow money.

If in fact Congress is able to raise the debt ceiling, that will come with a price more than likely in the form of spending cuts. The debates and negotiations will begin in September 2013. President Obama and the Democrats would like to raise the debt ceiling without additional spending whereas, the Republicans are proposing spending cuts in the areas: Medicare, Medicaid, Food Stamps (SNAP program), agricultural commoditydebt ceiling3 and insurance programs.  As you will recall from earlier this year, a sequestration was put into place which was basically an across the board spending cut which was equally split between defense and non-defense areas. Some of the areas which were affected at that time include: military furloughs, cuts to education and grants, cuts to medical research, cuts to teaching hospitals, and the big one – cuts to Medicare. Some experts are stating the debt ceiling issue could actually lead to the government shutting down. Are we on the brink of brinkmanship?

What do you think?

The political debate over the debt ceiling comes down to whether it is funded with or without spending cuts. Is there any middle ground? Are there compromises which could be made? Do we just need to figure out how to live within our means and not raise the debt ceiling? Where does this process end? What is your opinion?

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BHM is a healthcare management consulting firm whose specialty is optimizing profitability while improving care in a variety of health care settings. BHM has worked both nationally and internationally with managed care organizations, providers, hospitals, and insurers. In addition to this BHM offers a wide breadth of services ranging including managed care consulting, strategic planning and organizational analysis, accreditation consulting, healthcare financial analysis, physician advisor/peer review, and organizational development.

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