News

The Latest On The Debt Talks (It's Not Pretty)

by Lane Florsheim

Democratic and Republican Congresspeople traded major fighting words on the issue of the federal debt limit Tuesday. Unless an agreement is reached to raise the current $16.7 trillion debt limit, the United States government's borrowing authority will expire in mid-October, and the government will default on its debt.

Republicans argue that, in the past, fiscal reforms have been attached to debt limit hikes.

“It is quite common for requests of presidents to raise the debt ceiling to be accompanied by significant legislation that addresses the question of the debt,” Senate Minority Leader Mitch McConnell (R-KY) told reporters at his weekly Capitol briefing, rattling off examples.

Indeed, Obama entered negotatiations with Republicans in 2011 over raising the debt ceiling. However, as Talking Points Memo points out, prior to that 2011 standoff (that brought the U.S. within hours of default), those examples involved compromises from both parties and lacked the threat of default if an agreement was not reached. That level of responsibility is — surprise, surprise — not present in current debates, which has experts arguing that the government is really headed toward shutdown.

Democrats, for their part, are refusing to budge. A slew of House Democrats, including all five members of its leadership, signed a letter to President Obama, urging the president to not relent on his pledge not to negotiate on raising the debt limit and warning of the dangers of defaulting on the nation's debt. The letter is being circulated by Representative Peter Welch (D-MT).

The letter was shared with Politico, and part of it reads:

We appreciate your strong leadership on this issue and share your view that defaulting on our obligations would cause immediate and irreparable harm to America’s economy. We pledge our support for a clean extension of the debt ceiling when Congress takes this issue up later this year.

Additionally, Treasury Secretary Jack Lew reiterated Tuesday that the administration won't discuss terms with Congress over raising the debt ceiling.

“I want to repeat what the president has already made clear: He will not negotiate over the debt ceiling,” Lew told the Economic Club of Washington. “He will not accept measures that would tie a debt limit increase to defunding or delaying the Affordable Care Act, which was passed by Congress and upheld by the Supreme Court.”

Obama doesn't appear to be straying course, however.

"I cannot remember a time when one faction of one party promises economic chaos if it can't get 100 percent of what it wants," Obama said Monday during remarks that were largely overshadowed by the Navy Yard shooting. "That's never happened before."

"Are some of these folks so beholden to one extreme wing of their party that they're willing to tank the economy?" Obama asked. "Are they really willing to hurt people just to score political points?"And so the battle wages on.