On Monday, President Barack Obama will become directly involved in the stalled negotiations over the U.S. national debt amid debate over raising the federal borrowing limit. The president is expected to meet separately with the Democratic and Republican leaders of the Senate, days after a key Republican lawmaker walked out of talks that had been led by Vice President Joe Biden. Legislators of both parties show little interest in compromising.
The United States risks defaulting on its $14 trillion national debt unless Congress raises the federal debt ceiling in the coming weeks. Republicans, who control the House of Representatives, insist that the rate at which the United States incurs debt must be cut sharply if they are to vote to increase the debt limit.
Lawmakers of both parties agree that America’s fiscal outlook must improve. But a bipartisan solution remains elusive. Republicans are demanding deep spending cuts with no tax increases, a position that Senate Minority Leader Mitch McConnell says he will present to Mr. Obama at the White House. “We have been spending way too much. We have a spending problem. We do not have a problem because we tax too little," he said.
McConnell spoke on ABC television's "This Week" program.
Democrats accuse their Republican colleagues of holding the debt ceiling vote hostage to an ultra-conservative fiscal agenda they could never enact on their own.
Senate Majority Leader, Democrat Harry Reid will also meet with President Obama to discuss the debt situation. “The Republicans should stop playing [a dangerous game] and pushing us too close to that line," he said.
The line Reid is referring to is a possible default on U.S. debt obligations.
Democrats agree that federal spending must be reduced, but add that cuts alone will not solve America’s fiscal woes. They say a combination of spending restraint and increased revenue is the only realistic option for cutting the federal deficit.
Democratic Representative James Clyburn of South Carolina says that to increase government revenue, tax breaks for favored industries like oil companies should be eliminated. “You only hike taxes when you raise rates [of taxation]. We are not asking anybody to raise anybody’s rates. We want effective tax collection, close these [special tax exemptions], stop giving billions of dollars in breaks," he said.
Clyburn also appeared on ABC's "This Week."
Republicans counter that added tax revenues, regardless of the source, will only enable ever-higher federal spending.
Senator McConnell said, “We think it is important to take advantage of this opportunity to do something really important to move this country in a different direction. Under this administration, we have increased spending 35 percent in two-and-a-half years. We need to stop that.”
The war of words in Washington’s hyper-partisan atmosphere makes compromise increasingly difficult. So says Republican Governor Chris Christie of New Jersey, who reached a landmark budget agreement with the state's Democratically-controlled legislature earlier this year.
Appearing on NBC television's "Meet the Press" program, Christie described the key to the deal. “We did not demagogue each other. And I think what happens here [in Washington] and what both parties are guilty of is demagoguing each other. So then it makes it almost impossible to sit across the table and bargain with each other," he said.
Economists say a default on U.S. debt obligations would trigger a global financial crisis, likely plunging the United States back into recession. Whether the specter of possible economic ruin can pierce partisanship and drive a debt ceiling agreement will be put to the test in the coming weeks.