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US Budget Battle Looms

Rep. Michele Bachmann, R-Minn., speaks to the Values Voter Summit, held by the Family Research Council Action, in Washington (File)
Rep. Michele Bachmann, R-Minn., speaks to the Values Voter Summit, held by the Family Research Council Action, in Washington (File)
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Days before Republicans take control of the U.S. House of Representatives, partisan battle lines are being drawn over America's fiscal future.

Republicans will boost their numbers in both legislative houses, and say they have a simple message for the new Congress that convenes later this week.

"Stop spending money that you do not have," said Republican Congresswoman Michele Bachmann of Minnesota on CBS' Face The Nation program, noting America's trillion-dollar federal deficit and the runaway U.S. national debt.  One of the first budget battles of 2011 will center on whether to raise the debt ceiling in order to finance federal borrowing.

Republican congressman-elect Mike Kelly of Pennsylvania says Congress must be more frugal.

"Raising the debt ceiling, to me, is absolutely irresponsible," said Kelly.  "We have been spending money for so long that we do not have, and keep saying that it is okay, that we will raise taxes and find it [revenue] somewhere."

Failing to raise the debt ceiling could cause the U.S. government to run out of money and default on its obligations to bond holders around the world.  The Obama administration says that would spark a calamitous global financial crisis.

President Barack Obama's top economic advisor, Austan Goolsbee, says federal deficits must be trimmed, but not in a way that chokes off a fledgling economic recovery or constrains future economic growth prospects.

Dr. Austan Goolsbee on Capitol Hill in Washington (File Photo)
Dr. Austan Goolsbee on Capitol Hill in Washington (File Photo)


"If you are going to skimp on important investments that we need to grow, you are making a mistake," said Goolsbee.  "The longer-run fiscal challenge facing the country is important.  But that is totally different than saying we should tighten the belt in the midst of coming out of the worst recession since 1929."

Goolsbee spoke on ABC's This Week program.

Democrats will continue to control the U.S. Senate, although with a reduced majority from last year, as well as the White House. That will make it difficult for newly-elected Republicans to make good on campaign promises, like repealing President Obama's health-care reform initiative.

But Republicans could refuse to support federal spending levels sought by Democrats.  A budget impasse could force a government shut-down as occurred in 1995, when another first-term Democratic president, Bill Clinton, confronted a Republican-controlled Congress.

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