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

Multimedia Social Media Documenting, Not Driving, Hong Kong Protests

Unlike in Arab Spring uprisings, pro-democracy protesters in Hong Kong aren't relying on Twitter and Facebook to organize, but social media still plays a role More

Analysis: Occupy Central Not Exactly Hong Kong’s Tiananmen

VOA's former Hong Kong, Beijing correspondent compares and contrasts 1989 Tiananmen Square protest with what is now happening in Hong Kong More

Bambari Hospital a Lone Place of Help in Violence-Plagued CAR

Only establishment still functioning in CAR's second city is main hospital More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
The Legacy of Jimmy Carter: The Preacher from Plainsi
X
October 01, 2014 10:45 AM
It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video The Legacy of Jimmy Carter: The Preacher from Plains

It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video Hong Kong Protests Draw New Supporters on National Holiday

On the 65th anniversary of the founding of Communist China, Hong Kong protesters are hoping to stage the largest pro-democracy demonstration since the 1989 Tiananmen protests. VOA's Brian Padden visited one of the protest sites mid-day, when the atmosphere was calm and where the supporters were enthusiastic about joining what they are calling the umbrella revolution.
Video

Video India's PM Continues First US Visit

India's prime minister is on his first visit to Washington, to strengthen political and economic ties between the world's oldest and the world biggest democracies. He came to the U.S. capital from New York, the first stop on his five-day visit to the country that denied him an entry visa in the past. From Washington, Zlatica Hoke reports Modi seemed most focused on attracting foreign investment and trade to increase job opportunities for his people.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid