CHN: Twenty-three Senators Threaten the President With Vote Against Debt Ceiling Increase
In a letter to President Obama dated March 16, 23 Republican Senators pointed to the upcoming need to increase the limits on borrowing by the federal government, and told the President to lead a bipartisan effort to limit the growth of mandatory spending programs such as Medicare, Medicaid, and Social Security. If he does not, the letter added, “it will be difficult, if not impossible, for us to support a further increase in the debt ceiling.”
The federal debt ceiling, now set at $14.3 trillion, is expected to be reached somewhere between April 15 and the end of May (some have estimated the limit might be reached in June). Failure to increase it would mean the federal government would not be able to pay some of its obligations, including spending on government programs and payments owed to bondholders. Most analysts believe that refusal to increase the debt ceiling would create grave problems for the U.S. economy, leading to downgrading of government bonds and higher interest payments. World confidence in U.S. economic stability would be undermined. Secretary of the Treasury Timothy Geithner described the potential failure to increase the ceiling as “catastrophic” for the economy, as reported by Reuters on March 16.
The major deficit reduction proposals (including the bipartisan National Commission on Fiscal Responsibility and Reform and the Bipartisan Policy Center Domenici-Rivlin plan) have recognized that a long-term deficit reduction plan will need to increase revenues, reduce entitlement spending, and seek reductions in military spending. In demanding that the President focus on entitlements alone, this group of senators is attempting to force major decisions inconsistent with the dominant thinking on deficit reduction, and to do it within an impossibly quick time frame.
One of the letter’s signers, John Cornyn (R-TX), was quoted in Congressional Quarterly as suggesting that the debt ceiling could be increased by small enough increments to keep it coming before Congress, offering multiple opportunities to force consideration of this group’s entitlement reduction plans. (See the letter text and list of signers.)