News / USA

Plans to Raise US Debt Ceiling Mired in Congress

House Speaker John Boehner of Ohio speaks with reporters on Capitol Hill in Washington, DC, June 23, 2011
House Speaker John Boehner of Ohio speaks with reporters on Capitol Hill in Washington, DC, June 23, 2011
Michael Bowman

Daunting hurdles remain for two legislative plans to cut U.S. government spending, raise the federal borrowing limit and avert a national debt crisis experts warn that could stall America’s fragile economic recovery and send financial shock waves around the world.  

With a deadline to raise the federal debt ceiling less than a week away, the two latest plans, one Republican, the other Democratic, face almost-certain defeat in one or both chambers of a politically-divided Congress.

Senior Republican lawmakers scrambled Wednesday to rework a plan put forth by House of Representatives Speaker John Boehner after nonpartisan congressional analysts said it would fall short on promised spending cuts.  And some members of the conservative and libertarian Tea Party faction of the Republican caucus vowed to vote against the plan or any proposal that would raise the nation's debt ceiling.

“I pledge to you that I will not vote for any bill that raises the debt ceiling,” said Republican Representative Paul Brown of Georgia.

House Republican leaders are pleading for party unity, without which the Boehner plan might be doomed in the House and leave a Democratic proposal as the only viable alternative.  Both plans call for spending cuts, but the Boehner proposal would raise the debt ceiling in two stages.  The Democratic plan would provide one large-scale increase, preserving federal borrowing authority through next year’s national elections.

In the Senate, one of the Republican Party’s senior statesmen, John McCain of Arizona, chided first-term House Republicans who dismiss the consequences of a possible U.S. debt default.

“The idea seems to be that if the House GOP [Republicans] refuses to raise the debt ceiling, a default crisis or gradual government shutdown will ensue, and the public will turn en masse against [President] Barack Obama, that the Republican House that failed to raise the debt ceiling would somehow escape all the blame.  The reality is that the debt limit will be raised one way or another.  And the only issue now is, with how much fiscal reform and with what political fallout?,” McCain said.

Democrats pounced on Republican dissension over the Boehner plan.

“The speaker’s plan is on life support, and it is time for him to pull the plug. The bill remains a nonstarter in the Senate, and the president will never sign it,” said Democratic Senator Charles Schumer of New York.

Senate Majority Leader Harry Reid, who crafted the Democratic proposal, said his plan abides by Republican demands for no tax increases and deep spending cuts, and is therefore a compromise that deserves bipartisan support.

“We have compromised.  The Senate bill was written to take care of the problems Democrats said they had and Republicans said they had,” Reid said.

The Reid plan leaves untouched expensive entitlement programs that provide income and health care for retirees, programs many Democrats are reluctant to alter.

Republicans say that the Reid plan’s promised spending cuts are an illusion. They note, for example, that it counts projected savings from U.S. military withdrawals in Afghanistan and Iraq, savings that are already included in current budget projections.

“I remain as committed as ever to resolving this crisis in a way that will allow us to avoid default, without raising taxes, and to cut spending, without budget gimmicks,” said Senate Minority Leader, Republican Mitch McConnell.

Even if the federal borrowing limit is extended, it is unclear whether either plan adequately addresses America’s long-term fiscal imbalances.  The U.S. national debt stands at $14.3 trillion.

Analysts say that without aggressive measures to slow the growth of that debt, credit ratings agencies will assign a higher risk rating to U.S. Treasury bonds, which the federal government sells to investors and foreign governments to finance deficit spending.  Such a downgrade, they warn, might lead to higher interest rates that could stall America’s fragile economic recovery.

You May Like

Ebola Death Toll Nears 5,000 as Virus Advances

West Africa bears heaviest burden; Mali toddler’s death raises new fears More

Jordan’s Battle With Islamic State Militants Carries Domestic Risks

Despite Western concerns that IS militants are preparing a Jordanian offensive, analysts call the kingdom's solid intel a strong deterrent More

Asian-Americans Assume Office in Record Numbers

Steadily deepening engagement in local politics pays off for politicians like Chinese-American Judy Chu More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video Comanche Chief Quanah Parker’s Century-Old House Falling Apart

One of the most fascinating people in U.S. history was Quanah Parker, the last chief of the American Indian tribe, the Comanche. He was the son of a Comanche warrior and a white woman who had been captured by the Indians. Parker was a fierce warrior until 1875 when he led his people to Fort Sill, Oklahoma, and took on a new, peaceful life. As VOA’s Greg Flakus reports from Cache, Oklahoma, Quanah’s image remains strong among his people, but part of his heritage is in danger of disappearing.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid