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

Conflicts Engulf Christians in Mideast

Research finds an increase in faith-based hostilities, and Christians are facing persecution in a growing number of countries in the region More

Chinese Americans: Don’t Call Us 'Model Minority'

Label points to collective achievement, but some say it triggers resentment, unrealistic expectations More

Iran Bolsters Phone, Internet Surveillance

Does increased monitoring suggest the government is nervous? 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.
West Africa Ebola Vaccine Trials Possible by Early 2015i
X
Carol Pearson
August 30, 2014 7:14 PM
A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Polish Ghetto

When the Nazi army moved into the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Cost to Raise Child in US Continues to Rise

The cost of raising a child in the United States continues to rise. In its latest annual report, the U.S. Department of Agriculture says middle income families with a child born in 2013 can expect to spend more than $240,000 before that child turns 18. And sending that child to college more than doubles that amount. VOA’s Deborah Block visited with a couple with one child in Alexandria, Virginia, to learn if the report reflects their lifestyle.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.

AppleAndroid