News / USA

Budget Stand-off Could Again Impact US Credit Rating

The U.S. Capitol building, November 2011 file photo.The U.S. Capitol building, November 2011 file photo.
x
The U.S. Capitol building, November 2011 file photo.
The U.S. Capitol building, November 2011 file photo.
Michael Bowman
Republican lawmakers are not ruling out using America’s debt limit as a bargaining chip in looming deficit reduction battles with congressional Democrats and the Obama administration.  A similar partisan dynamic in 2011 led to a downgrade of the nation’s credit rating.

A new year and the swearing in of a new Congress have not erased familiar battle lines between Democrats and Republicans when it comes to reining in America’s runaway national debt.

The Senate’s top Republican, Minority Leader Mitch McConnell, appeared on numerous U.S. television programs Sunday.  He repeatedly was asked if his party will link raising the federal government’s borrowing limit to deep spending cuts.  This was his response on CBS’ Face the Nation program.

What I am willing to say is, if the president will not lead us in the direction of reducing this massive spending addiction that we have, then we have to use whatever leverage we have.  And there are some examples of leverage coming along.  The debt ceiling is one of them," he said.

Failure to grant additional borrowing authority could cause the federal government to run out of funds in coming months, and could shake global confidence in U.S. credit worthiness.

As in 2011, many Republicans today are demanding a dollar in spending cuts for every dollar increase in the debt ceiling.  But unlike two years ago, President Barack Obama says he will not bargain over the debt limit - a stance that all but dares Republicans to follow through on a threat that economists warn could inflict massive damage to the U.S. and global economy.

Democrats, like House Minority Leader Nancy Pelosi, point out that a higher debt ceiling is required to cover spending Congress already approved.  She argues it is a separate issue from looming budget battles over future federal spending.

“Right now we have to pay the bill that has been incurred.  If you want to cut spending for what we do next, [that is] fine.  But you cannot say, ‘I am not paying the past debt’," she said.

Republicans counter that absent dire consequences for inaction Congress will never agree to the painful spending cuts and reforms required to solve America’s fiscal woes.  Democrats point out they have already voted in favor of more than $1 trillion in federal spending cuts.  President Obama has said he is open to reforming costly programs that provide health care and other benefits to retirees.

Last week, Congress approved a measure to avert automatic tax hikes and delay deep spending cuts mandated under the so-called “fiscal cliff."   The last-minute deal raised income tax rates for top earners.  

President Obama says a mix of spending cuts and additional revenues will be needed to reduce America’s trillion-dollar federal deficit.  Republicans say taxes have already been dealt with, and debt-reduction efforts must now focus on spending alone.

You May Like

Video VOA EXCLUSIVE: Iraq President Vows to Fight IS 'Until They Are Killed or We Die'

In wide-ranging interview with VOA Persian service reporter, Fuad Masum describes conflict as new type of fight that will take time to win More

Video Russian Anti-Corruption Campaigner Slams Putin’s Crackdown on Dissent

In interview with VOA Alexei Navalny says he believes new law against 'undesirable NGOs' part of move to keep Russian president in power More

Video On The Scene: In Ethiopia, 'Are You a Journalist?' Is a Loaded Question

VOA's Anita Powell describes the difficulties faced by reporters in fully conveying the story in a country where people are reticent to share their true opinions More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Expelled from Pakistan, Afghan Refugees Return to Increased Hardshipi
X
Ayesha Tanzeem
May 28, 2015 6:48 PM
Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Expelled from Pakistan, Afghan Refugees Return to Increased Hardship

Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Britain Makes Controversial Move to Crack Down on Extremism

Britain is moving to tighten controls on extremist rhetoric, even when it does not incite violence or hatred -- a move that some are concerned might unduly restrict basic freedoms. It is an issue many countries are grappling with as extremist groups gain power in the Middle East, fueled in part by donations and fighters from the West. VOA’s Al Pessin reports from London.
Video

Video Floodwaters Recede in Houston, but Rain Continues

Many parts of Texas are recovering from one of the worst natural disasters to hit the southwestern state. Heavy rains on Monday and early Tuesday caused rivers to swell in eastern and central Texas, washing away homes and killing at least 13 people. As VOA’s Greg Flakus reports from Houston, floodwaters are receding slowly in the country's fourth-largest city, and there likely is to be more rain in the coming days.
Video

Video 3D Printer Makes Replica of Iconic Sports Car

Cars with parts made by 3D printers are already on the road, but engineers are still learning about this new technology. While testing the possibility of printing an entire car, researchers at the U.S. Department of Energy recently created an electric-powered replica of an iconic sports roadster. VOA’s George Putic has more.
Video

Video Al-Shabab Recruitment Drive Still on In Kenya

The al-Shabab militants that have long battled for control of Somalia also have recruited thousands of young people in Kenya, leaving many families disconsolate. Mohammed Yusuf recently visited the Kenyan town of Isiolo, and met with relatives of those recruited, as well as a many who have helped with the recruiting.
Video

Video US Voters Seek Answers From Presidential Candidates on IS Gains

The growth of the Islamic State militant group in Iraq and Syria comes as the 2016 U.S. presidential campaign kicks off in the Midwest state of Iowa.   As VOA’s Kane Farabaugh reports, voters want to know how the candidates would handle recent militant gains in the Middle East.
Video

Video A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensions

When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video Film Festival Looks at Indigenous Peoples, Culture Conflict

A recent Los Angeles film festival highlighted the plight of people caught between two cultures. Mike O'Sullivan has more on the the Garifuna International Film Festival, a Los Angeles forum created by a woman from Central America who wants the world to know more about her culture.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.
Video

Video Iowa Family's Sacrifice Shaped US Military Service for Generations

Few places in America have experienced war like Waterloo. This small town in the Midwest state of Iowa became famous during World War II not for what it accomplished, but what it lost. As VOA’s Kane Farabaugh reports, the legacy of one family’s sacrifice is still a reminder today of the real cost of war for all families on the homefront.

VOA Blogs