News / USA

US Borrowing Limit Debated

From left, House Ways and Means Committee Chairman Rep. Dave Camp, R-Mich., Rep. Diane Black, R-Tenn., House Budget Committee Chairman, Rep. Paul Ryan, R-Wis., Republican Conference Chairman Rep. Jeb Hensarling, R-Texas, and House Majority Leader Eric Can
From left, House Ways and Means Committee Chairman Rep. Dave Camp, R-Mich., Rep. Diane Black, R-Tenn., House Budget Committee Chairman, Rep. Paul Ryan, R-Wis., Republican Conference Chairman Rep. Jeb Hensarling, R-Texas, and House Majority Leader Eric Can
Michael Bowman

Days after a grueling, partisan battle on federal spending ended with a bill to fund the U.S. government through September, a new battle is underway over America’s long-term fiscal woes.  Democrats and Republicans are offering competing visions to reduce a $1.5 trillion federal deficit and slow the growth of a $14 trillion national debt. A complicating factor is the need to raise the limit on the amount of money the U.S. government can borrow to cover its debt obligations.

Like any government that spends more than it collects in revenue, the U.S. government borrows what it needs to close the budget gap. The amount that can be borrowed is capped by law - a so-called "debt ceiling". Periodically, Congress must set a new, higher limit to allow additional borrowing. Failure to raise the debt ceiling could cause the federal government to default on its obligations to lenders, including creditor nations like China.

Weeks from now, the U.S. government will once again bump up against the borrowing limit.  But raising the debt ceiling is politically unpopular. In the past, Democratic and Republican legislators have railed against doing so, including Barack Obama before he became president.  
In 2006, then-Senator Obama voted against raising the debt limit, which he said reflected "leadership failure" in Washington under then-President George W. Bush.

Obama has since said he regrets the vote, calling it a mistake. The White House is urging Congress to promptly raise the debt ceiling to reassure credit markets and avoid even the suggestion that the United States might not honor its obligations.

Secretary of the Treasury,Timothy F. Geithner
Secretary of the Treasury,Timothy F. Geithner

Treasury Secretary Timothy Geithner says he is confident Congress understands the gravity of the situation.

"Congress will raise the debt ceiling," he said. "They [congressional leaders] recognize that America has to meet its obligations."

Geithner spoke on ABC’s This Week television program. The treasury secretary said, during a meeting at the White House last week, congressional leaders assured President Obama that they would act on the debt ceiling.

But Republicans, who control the House of Representatives, are attaching a condition to the debt-ceiling vote. They want an agreement with Democrats and the White House on federal-spending reductions. House Budget Committee chairman of Wisconsin spoke on CBS’ Face the Nation television program.

"Nobody wants to play around with the country’s credit rating.  Nobody wants to see default happening.  But we also think it is important to get a handle on future borrowing as we deal with raising the debt limit. We should not ignore the spending problem. It is why we have this debt problem in the first place."

Republican Senator Tom Coburn of Oklahoma was even more blunt, saying he will not vote to raise the debt ceiling without guarantees of spending cuts.

"I need absolute certainty that we have made the critical changes that are necessary to put this country back where it needs to go [fiscal solvency]," he said. "And unless we do that, there is no way I support it [raising the debt limit]."

Coburn spoke on Fox News Sunday.

Democrats say they are committed to deficit reduction, but warn that tying budget negotiations to the debt ceiling would invite financial ruin. Also appearing on Fox News Sunday was Chris Van Hollen, the top Democrat on the House Budget Committee.

"We have to make good on the full faith and credit of the United States [debt obligations].  Otherwise we will have an economic catastrophe," he said. "Saying you are only going to vote for the debt ceiling if something particular happens on deficit reduction is like playing Russian roulette with a fully-loaded revolver."

If Republicans hold firm on demanding a deficit reduction deal before allowing the debt ceiling to rise, negotiations could be the most furious and contentious yet seen in the ongoing budget debate. Republicans favor deep cuts in domestic spending as a primary tool to achieve fiscal balance. Democrats acknowledge the need for spending restraint, but say tax hikes on the wealthy should be part of a comprehensive deal.

You May Like

Philippines, Muslim Rebels Try to Salvage Peace Pact

Peace process faces major setback after botched military operation to find terrorists results in bloody gunbattle between government forces, Moro Islamic Liberation Front fighters More

Republicans Expect Long, Expensive Presidential Battle

Political strategist says eventual winner will be one who can put together strongest coalition of various conservative groups that make up Republican Party More

Video New Wheelchair Is Easier to Use, Increases Mobility

Engineers have come up with a lever-operated design that makes use of easily accessible bicycle technology 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.
Liberia's Almost Last Ebola Patient Grateful but Still Grievingi
X
Benno Muchler
March 26, 2015 3:41 PM
Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video US, South Korea Conduct Joint Military Exercises

The Eighth U.S. Army Division and the Eighth Republic of Korea Mechanized Infantry Division put on a well orchestrated show of force for the media this week during their joint military training exercises in South Korea. VOA’s Seoul correspondent Brian Padden was there and reports the soldiers were well disciplined both in conducting a complex live fire exercise and in staying on message with the press.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.
Video

Video Young Filmmakers Shine Spotlight on Giving Back

A group of student filmmakers from across the United States joined President Barack Obama at the White House this month for the second annual White House Student Film Festival. Fifteen short films were officially selected from more than 1,500 entries by students aged 6 through 18. The filmmakers and their families then joined the president and a group of celebrities for a screening of their films. VOA’s Julie Taboh reports.
Video

Video VOA Exclusive: Interview with Afghan President Ashraf Ghani

Afghan President Ashraf Ghani, during his first visit as president to Washington, gave a one-on-one interview with VOA Afghan Service reporter Said Suleiman Ashna, about his request for a change in U.S. troop levels, the threat from the Islamic State, and repairing relations with the United States and Pakistan. The interview was held at Blair House, late Sunday, in Pashto.
Video

Video California Science Center Tells Story of Dead Sea Scrolls

The ancient manuscripts were uncovered in the mid-20th century, and they are still yielding clues about life and religious beliefs in ancient Israel. As VOA's Mike O'Sullivan reports, an exhibit in Los Angeles shows how modern science is bringing the history of these ancient documents to life.
Video

Video Angelina Jolie Takes Another Bold Step

Hollywood actress and filmmaker Angelina Jolie has revealed she had her ovaries and fallopian tubes removed to lower her odds of getting cancer. Doctors say the huge publicity over her decision will help raise awareness about the importance of cancer screening. VOA’s George Putic has more

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More