With weeks to go before the United States risks defaulting on its $14 trillion national debt, Democrats and Republicans are sticking to conflicting, partisan prescriptions for improving the nation’s finances.
Lawmakers of both major political parties agree the federal government must cut spending to reduce a $1.6 trillion deficit. But they disagree on how deeply to cut and whether additional revenues should be part of a formula to bridge the budget gap. Republican Senator John Cornyn of Texas on the Fox News Sunday television program.
“Republicans are opposed to any tax hikes, particularly during a fragile economic recovery," he said. "The last thing that employers need is further disincentives to hire people, and that is what higher taxes would mean.
Instead of tax hikes, Cornyn advocates deep spending cuts in most federal endeavors other than national defense.
Democrats say a one-sided approach to deficit reduction would stunt national progress and harm the vulnerable. President Barack Obama made the case for eliminating special tax breaks for corporations and the wealthy in his weekly radio address Saturday.
“If we choose to keep those tax breaks for millionaires and billionaires, or for hedge fund managers and corporate jet owners, or for oil and gas companies pulling in huge profits without our help - then we will have to make even deeper cuts somewhere else," he said. "We have got to say to a student, ‘You do not get a college scholarship.’ We have to say to a medical researcher, ‘You cannot do that cancer research.’ We might have to tell seniors, ‘You have to pay more for Medicare.’”
Senator Cornyn says he would support ending tax breaks as part of a larger tax-reform package in which overall tax rates are reduced, thereby making the initiative revenue-neutral. He does not favor altering the federal tax code to boost government revenue.
“I think the American people understand that raising taxes grows the size of the federal government," said Cornyn. "They want government to get smaller, not bigger. They feel government has become far too intrusive in their lives.”
The partisan stand-off comes as an August 2 deadline looms for raising the federal borrowing limit. Absent a deal to cut the deficit and slow the growth rate of the national debt, many Republicans say they will not vote to increase the debt ceiling. Without additional borrowing authority, the federal government risks defaulting on its debt obligations, which could spark a financial crisis.
Some Democrats have argued President Obama could end the standoff by challenging the constitutionality of the debt ceiling and ignoring the law. The 14th Amendment to the U.S. Constitution states that the public debt of the United States “shall not be questioned.” Senator Cornyn blasted any attempt to sidestep the debt ceiling as “crazy talk”, saying it would be an abdication of the president’s responsibility to arrive at a negotiated solution to the nation’s debt woes.