Syria Likely to Complicate Debt Limit Fight: Orszag

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Sept. 4 (Bloomberg) -- Bloomberg Contributing Editor Peter Orszag discusses the debt ceiling and the future of "Obamacare" with Tom Keene on Bloomberg Television's "Bloomberg Surveillance." (Source: Bloomberg)

The real question is callow what is the international reception for the united states?

Nicer buildings in pittsburgh, but not the vision of pittsburgh, which is about economics, the president distracted by syria.

Peter orszag joins us, former omb director, bloomberg contributor, and more than anything one of the nation's top economists.

Did you know that there are other issues besides syria?

There are.

You made a victory lap.

Whenever anybody says, whatever their politics, the unemployment rate has come down.

Can the unemployment rate come down lower?

Can be summed up by a better debt trajectory that we like right now?

It is still higher than it should be.

The same for the debt?

We can take a modest victory lap.

But what about the debt ceiling?

Things seem to be moving in the right direction, but not nearly enough.

The deficit this year may be 4% of gdp, much better than people would have anticipated.

It is a decent reduction, but the far bigger driver over the next 10 to 15 years is still something that does not have enough attention, medicare spending has slowed down dramatically.

Do you have a reason?

I have been on this course for a while and am increasingly convinced that it is not just the economy.

There was a study from the congressional budget office economists suggesting the economic slowdown cannot explain any of the medicare deceleration, which makes sense because those beneficiaries triplicate the do not have co- payments.

You have also come out in support of the president's health-care law, and implementation of that has been very shaky.

What is interesting is that relative to the conventional wisdom of 2010, the implementation back then was all that this coverage does nothing about cost.

As we move forward in time, the cost story has turned out better than expected.

The cover story, there are bumps in the road.

I want to put you into the classroom at the london school of economics, explain why the debt ceiling is not a big deal.

Explain for our listeners and viewers worldwide why it is overwrought and overdone fear.

The first thing is why it does not make sense, the second is what will happen.

The first, if you were a family or business and you set a budget, it does not then make sense to later say and we are also going to make sure the difference between what we spend and what our income was is going to be subject to different constraint, which is exactly what the debt limit is.

You have already decided what you want to spend and then you come along with a separate constraint or limit on the difference between the two.

Is that part of interest rates that cannot be controlled?

But if we just focused on interest rates you would be including an arbitrary concept that does not make sense.

More importantly, that kind of post-real position on the constraint does not make sense.

Obviously, that could differ.

What do you think will happen besides the serious issues in syria?

It may well complicate what happens on the debt limit, because do not forget you are going to people and asking for votes on syria and it may wind up being -- i gave it the office.

The problem on the debt limit is it is hard to see how these sides come together.

Eventually they will, but right now it is hard to see.

The reason is because the house republicans have laid down a rule that every dollar has to be matched by a $1 reduction in spending, but they have not laid out a credible path for how that by happened.

It is not plausible that the administration will agree to delay the health bill or obama care for the debt limit.

There is no credible proposal out there to do this.

With all this coming on the president has to make a decision on the next fed share, does that get delayed as well?

The serial thing may complicate things.

If you are worried about confirmation and asking for syria votes, it just shows again

This text has been automatically generated. It may not be 100% accurate.

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