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

Multimedia Social Media Documenting, Not Driving, Hong Kong Protests

Unlike in Arab Spring uprisings, pro-democracy protesters in Hong Kong aren't relying on Twitter and Facebook to organize, but social media still plays a role More

Bambari Hospital a Lone Place of Help in Violence-Plagued CAR

Only establishment still functioning in CAR's second city is main hospital 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.
The Legacy of Jimmy Carter: The Preacher from Plainsi
X
October 01, 2014 10:45 AM
It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video The Legacy of Jimmy Carter: The Preacher from Plains

It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video Hong Kong Protests Draw New Supporters on National Holiday

On the 65th anniversary of the founding of Communist China, Hong Kong protesters are hoping to stage the largest pro-democracy demonstration since the 1989 Tiananmen protests. VOA's Brian Padden visited one of the protest sites mid-day, when the atmosphere was calm and where the supporters were enthusiastic about joining what they are calling the umbrella revolution.
Video

Video India's PM Continues First US Visit

India's prime minister is on his first visit to Washington, to strengthen political and economic ties between the world's oldest and the world biggest democracies. He came to the U.S. capital from New York, the first stop on his five-day visit to the country that denied him an entry visa in the past. From Washington, Zlatica Hoke reports Modi seemed most focused on attracting foreign investment and trade to increase job opportunities for his people.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid