A new report from the Government Accountability Office finds that last year’s debt ceiling showdown between House Republicans and the White House cost the government $1.3 billion – increasing market uncertainty and raising federal borrowing costs.
“Delays in raising the debt limit can create uncertainty in the Treasury [bond] market and lead to higher Treasury borrowing costs. GAO estimated that delays in raising the debt limit in 2011 led to an increase in Treasury’s borrowing costs of about $1.3 billion in fiscal year 2011,” GAO reported Monday.
In other words, because Congress and the White House waited until the absolute last minute to raise the debt ceiling, the government had to pay an extra $1.3 billion in higher interest rates, according to the government watchdog agency.
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