Watch CBSN Live

What happens if debt ceiling isn't raised?

Today the U.S. Treasury is expected to reach its $14.3 trillion debt ceiling. That's the amount at which our federal debt is capped. The only way it can be raised is with a vote by Congress. Currently, President Obama and Republicans are squabbling over hiking it.

Sunday on "Face The Nation," Speaker of the House John Boehner said President Obama needs to get serious about the deficit.

Boehner on "Face the Nation"

Boehner said, "He's talking about it. But I'm not seeing real action yet. And I just think this is the moment. We all know what the problems are. Why don't we just deal with them? No more kicking the can down the road, no more whistling past the graveyard. Now is the time to deal with the fiscal problems we have in an adult-like manner."

On "The Early Show" Monday, CBS News Business and Economics Correspondent Rebecca Jarvis explained that the U.S. is facing this ongoing debt question because the country is spending more money than it's making.

She said, "For every dollar that the U.S. government spends, about 60 cents of that dollar comes from collections in taxes. But 40 cents of that money comes from our borrowings. That means we need to raise debt as a country in order to really generate the kind of growth and pay the kind of commitments that we've made to pensioners, to people who are taking Social Security, Medicare -- all of these programs that are out there -- that are supposed to help Americans."

Jarvis continued, "We have to borrow to make good on those commitments. As a result of that ... (if) we don't pass the debt ceiling, some of those things could actually be hindered. Payments on many of those programs may not be met."

Though analysts believe the debt ceiling will be reached today, Jarvis said the actual major deadline for the country is August 2, 2011.

She said, "That's the day when (the) Treasury, Congress, they can't get more money to meet those obligations. There's been a lot of trepidation around this because, not only is this a question of a debt ceiling, but it's also a question of just too much debt. So there's fear about that in general."

Co-anchor Chris Wragge noted that a new Gallop poll says 47 percent of Americans don't want the debt ceiling to be raised. However, Boehner and Mr. Obama both agree the limit should be raised. But the ways each official has of getting there are totally different.

Jarvis said the two men have a "pretty significant divide" in their ideologies about the debt.

She explained, "What you have from Speaker Boehner is a plan where we raise the debt ceiling, but we also cut future spending. From the president, what we have is more of a plan where we raise the debt ceiling and we sort of strip out that future question mark and we approach that future question mark at a later date and also potentially raise taxes in order to get there."

Wragge switched gears, asking about the possible impact of the arrest of International Monetary Fund (IMF) chief Dominique Strauss-Kahn on Greece -- a nation he was instrumental in bailing out of financial ruin -- and the rest of the world.

IMF head's scandal may affect U.S. budget debate

Jarvis said, "Remember, Greece is in this rut because it took on too much debt as a country and the International Monetary Fund, as well as the overall European Union, had to step up to bail them out. Right now, the market is relatively unfazed by the question of Dominique Strauss-Kahn's future. But the market is fazed by the future of Greece - because it's a huge question, and it will have huge implications, and a ripple effect for us here in the United States. When it was an open question last week, before all of this drama around the IMF chief, it was still a major issue for the markets, and we did see declines here in the United States of that market, as well."