January 6th, 2013
01:32 PM ET
1 year ago

Lawmakers dig in on debt ceiling debate

(CNN) – The eleventh-hour compromise that avoided the fiscal cliff cannot be repeated when it comes time to raise the nation's debt ceiling, top lawmakers agreed Sunday.

But whether Republicans and Democrats can agree on how to raise the debt ceiling - specifically, whether or not to pair the increase with spending cuts - remains to be seen.

Speaking on CNN, Sen. Dick Durbin, the No. 2 Democrat in the Senate, said spending cuts and tax reform are needed as part of a balanced plan to further reduce the federal deficit, but that linking them to a routine increase in the debt ceiling was a perilous proposal from Republicans.

"The debt ceiling is something that we should put behind us in a hurry," Durbin told CNN chief political correspondent Candy Crowley on "State of the Union."

The country's borrowing has actually already passed its legal limit - currently $16.394 trillion. As a result, the Treasury can't borrow any more money in the markets, so it has begun to use "extraordinary measures" to ensure that the government can continue to pay all its bills in full and on time. But those measures can only buy about two months' grace.

If the ceiling isn't raised by late February or early March, the United States runs the risk of defaulting on its obligations, because the Treasury would no longer have enough money available to pay all the country's bills.

Republicans' vow to demand spending cuts in an amount equal to the debt limit increase "sounds like a bargain," Durbin said, but he added that it placed a caveat on negotiations that could lead to the nation defaulting on its debt.

"What I'm saying is the president should not have one of these last-minute showdowns over the debt ceiling, but we should speak in honest and I think complete terms about dealing with this deficit," Durbin said. "It truly is a challenge we haven't faced as much as we should."

Durbin's colleague, Republican Sen. Lindsey Graham, said he, too, was opposed to a last-minute vote to increase the nation's debt limit. Such an eleventh-hour deal was struck in August 2011 to raise the ceiling the last time the nation's debt reached its limit. The political haggling that put the country at the edge of default resulted in a credit downgrade from the ratings agency Standard & Poor's.

"In terms of the debt ceiling debate, the rank and file in my conference have had it with last-minute deals where you can't read the bill before the ink gets dry," Graham said, also on "State of the Union." "We've got to do better in the future than we've done in the past. This doing things at the last minute behind closed doors must stop."

But without spending cuts attached to the increase, Graham said he couldn't support the debt limit increase, no matter the urgency.

"I believe we need to raise the debt ceiling, but if we don't raise it without a plan to get out of debt, all of us should be fired," Graham said.

"If you raise the debt ceiling by a dollar, you should cut spending by a dollar. That is the way to go forward," he added.

Rep. Nancy Pelosi, the Democratic minority leader in the House of Representatives, said it didn't make sense to link spending with increasing the debt limit, since the debt had already been incurred.

"You're going to say, 'I'm not going to pay my bills unless you stop buying stuff?'" she wondered on CBS' "Face the Nation."

"Right now we have to pay the bills that have been incurred," she said. "If you want to say cut spending for what we do next, fine. But don't tie it to the debt ceiling."

CNNMoney's Jeanne Sahadi contributed to this report.

Watch State of the Union with Candy Crowley Sundays at 9am ET. For the latest from State of the Union click here.


Filed under: Debt • Economy • TV-State of the Union
soundoff (94 Responses)
  1. Fair is Fair

    Rudy NYC

    @Fair is Fair – I never blamed the cap for Social Security's woes. YOu are just so bent on being "against" that sometimes you lose your common sense. Read what I wrote
    ------–
    Ok, this is what you wrote:

    "Today that ratio has dwindled down to slightly more than 3:1. Part of his is due to the cap, and some of it is due to public sector workers who do not pay the tax at all."

    What did I miss, Rudy?

    January 7, 2013 01:36 pm at 1:36 pm |
  2. Goose66

    I am referring to all the Democrats that voted against raising the debt ceiling in the Bush years. I don't recall the idea that the debt ceiling is to pay debts already occurred ever being uttered by a Democrat in Congress. It was Congress's tool to inject fiscal discipline into the process – leverage over the President to curtail spending.

    January 7, 2013 01:37 pm at 1:37 pm |
  3. Blkbald

    In time of financial problems like this, congress agrees that spending is an issue that must be addressed... as they vote themselves a raise. This is your tax dollars at work and shows precisely how serious they view this issue.

    January 7, 2013 01:38 pm at 1:38 pm |
  4. why let them off the hook

    Rudy NYC
    The problem is the ratio of contributors to recipients. Private sector jobs are leaving the country, while public sector jobs are increasing and those workers do not contribute.
    --–
    then pass a law requiring all government employees pay into social security and medicare. if it is good enough for us, it should be good enough for them.

    January 7, 2013 01:38 pm at 1:38 pm |
  5. Barner

    We spend more than we bring in and we tax more than most nations. Try outspending your income for years on end and see what happens to your marriage, retirement, home and everything else. Obama had all the cards on the tax increase but that is done. If the GOP does not hold the line on spending they can get their resume up to date.

    BTW my tax increase for was less percentage wise than those making less than $50K and I make in the low six figures. People just thought it would not affect them and this is just the start. Rather you or I like it some will roll down hill also in inflation and cost of goods increases.

    January 7, 2013 01:40 pm at 1:40 pm |
  6. Rudy NYC

    Fair is Fair wrote:

    Public sector jobs do not contribute nor do they draw. So they're a wash. The fact that public sector jobs are increasing is indeed a problem as the public sector (government) is a net drain on the economy. I'm all for a reduction.
    --------------
    Incorrect. There are millions of people who have worked in the public sector all of their lives and are collecting Social Security. I know widowed spouses who have never worked on the books a day in their lives who are collecting Social Security. The most acute problem is the declining ratio.

    January 7, 2013 01:42 pm at 1:42 pm |
  7. houbie

    Congress is so focused on the rules of engagement in the next debt fight, they are missing the opportunity to work on alternatives for fixing the problem.

    Maybe that is because our Ivy-leagued/Harvard-educated drones are incapable of the creative thinking needed to get us out of this mess. That's understandable, but jeez, why not involve some types that are creative thinkers before it is too late?

    For example, we give away $800 billion in grants a year. That's free money. Why not say, " Until the debt is under $8 trillion, no more grants. You can have an interest free loan, that you pay back with 10% of your discretionary income for up to 20 years. What you don't pay off will be forgiven. If we get the debt under 8 trillion we will cut your loan balance accordingly."

    See? Instead of thinking the dolts in Congress are just plotting how to shutdown the government without any real plan for how to get it running again. That's what anarchists do.

    January 7, 2013 01:43 pm at 1:43 pm |
  8. Rudy NYC

    Goose66 wrote:

    I am referring to all the Democrats that voted against raising the debt ceiling in the Bush years. I don't recall the idea that the debt ceiling is to pay debts already occurred ever being uttered by a Democrat in Congress.
    -------------
    You don't recall much, do you? Republicans controlled the House for the first 6 years of the Bush administration. You didn't hear Democrats complaining because the spending was legislatively mandated, *just* like it is today.

    January 7, 2013 01:45 pm at 1:45 pm |
  9. simp

    Where was this whinning when GWB was raising the debt ceiling and throwing us into the recession he did in 2008, you people make me sick, you can say what you want but the republicians are the reason we are in such a bad economy.

    January 7, 2013 01:45 pm at 1:45 pm |
  10. California Gary

    @goose66......the debt ceiling was never in danger of not passing during the Bush years......a few made "protest" votes knowing that it would pass easily. Much different situation that what we have today.

    January 7, 2013 01:45 pm at 1:45 pm |
  11. awaken

    @ why let them off the hook
    My wife is a recently retired public sector employee (government). I can gaurantee you that each of her paychecks was taxed SS and medicare the same as others. Some jobs are exempt, state-run and city branches for example, like public school teachers and city workers, but federal employees are not exempt and do, in fact, pay into SS and medicare like the rest of us. So that argument is rather obsolete.

    January 7, 2013 01:47 pm at 1:47 pm |
  12. Terry

    Goose66 said:

    "I am referring to all the Democrats that voted against raising the debt ceiling in the Bush years. I don't recall the idea that the debt ceiling is to pay debts already occurred ever being uttered by a Democrat in Congress. It was Congress's tool to inject fiscal discipline into the process – leverage over the President to curtail spending."

    The debt ceiling was not enacted for any other reason than convenience, It was done during WWI when the country was borrowing to pay for the war. Previously, every time Treasury wanted to issue a debt instrument, Congress would have to approve it. This meant a lot of requests and a lot of votes, so Congress decided that, assuming you don't go over $X.XX, borrow what you need to to pay the bills. It has always been a procedural thing that was just done as a matter of course. The opposition party would have "Nay" votes for show, but would always provide sufficient "Yay" votes to ensure passage. It's called governing. We agreed to spend thi smoney, so borrow it if you need to. But to holds it hostage is a fool's errand. Constitutionally, it wouldn't stand if challenged. But it would never be challenged in court-it would have to be an impeachment issue, and the House will not go down that road. Now that Obama has his second term secured, I wouldn't be a bit surprise dif he just ignored the debt ceiling....

    January 7, 2013 01:52 pm at 1:52 pm |
  13. Donna

    Why can't I opt out of social security and medicare? I am being forced (as is my employer) to contribute to a hundred year old failing and nearly bankrupt government scam. The government has raided my retirement and spent the money from the lock box. They have replaced my money with IOUs from a near bankrupt country. If I die before reaching retirement, the government gets to keep all the money it has taken over the years. If it was in my personal account, it would be mine and I could pass it on to my heirs.

    The government isn't taking care of my retirement anymore, they are taking me for a ride under the pretense of "helping me". I want to opt out of this scam.

    January 7, 2013 01:52 pm at 1:52 pm |
  14. Fair is Fair

    Rudy says:

    "Incorrect. There are millions of people who have worked in the public sector all of their lives and are collecting Social Security. I know widowed spouses who have never worked on the books a day in their lives who are collecting Social Security. The most acute problem is the declining ratio."
    ----------
    You have to put in "quarters" (40 quarters, or 10 years to be exact) of social security withholding to be eligible to draw social security retirement benefits. To say otherwise is a 100% downright mistruth Rudy. Widowed spouses? Yes, they can collect their deceased spouses social security benefits under the surviving spouse section of the social security act... but only because their deceased spouse paid in.

    January 7, 2013 01:58 pm at 1:58 pm |
  15. Fair is Fair

    awaken

    @ why let them off the hook
    My wife is a recently retired public sector employee (government). I can gaurantee you that each of her paychecks was taxed SS and medicare the same as others. Some jobs are exempt, state-run and city branches for example, like public school teachers and city workers, but federal employees are not exempt and do, in fact, pay into SS and medicare like the rest of us. So that argument is rather obsolete.
    -------
    You listening, Rudy?

    January 7, 2013 02:04 pm at 2:04 pm |
  16. Pam

    Ol Barry complained about the debt ceiling being raised during the Bush administration, claiming it was 'unpatriotic.' He has no problem now that he is President. I think the Republicans should dig in and not give any increase until the Dems give meaningful spending cuts. Our credit was downgraded not only for the debt showdown; but also due to the government not making any signficant cuts. People blame Republicans for a lot anyway, dig your heels in boys and demand the spending cuts.

    January 7, 2013 02:12 pm at 2:12 pm |
  17. DumbasRocks [R]s

    California Gary: consider your hope that "there are at least a few remaining folks with the "R" behind their name" who might 'save' the [R] party.

    Well, look at the [R] party and what they've stood for in the past few elections, look at the [R] politicians who are in power and what they've attempted to do, and listen to the dumbfoundingly stupid comments the acolytic [R] parrots post on here......and then tell me if you really think there are ANY reasonable people left in the [R] party. What kind of person would continue to put a [R] beside their name after all of that!??!

    Wishful thinking, indeed. Today's [R] party is a useless shell, used by the rightwing underbelly as a front to some past respectability. Even the likes of R. Nixon is spinning in his grave over the abduction of the [R] party by uberpartisan drama queens with narrow agendas.

    January 7, 2013 02:13 pm at 2:13 pm |
  18. Ken in MD

    OK GOP, let's let this one slide as well. Don't increase the debt ceiling, default on our debts, and then complain when S&P lowers the country's credit rating even further. Why is it we're the only country with an artificial limit on our debt? Nobody else has a "debt ceiling". Especially one that gets raised every time we get close to it. Yes, every time. So why bother with it at all? It's just a tool for more political gamesmanship.

    January 7, 2013 02:14 pm at 2:14 pm |
  19. Fair is Fair

    @ Larry in Houston -

    You are correct. The only way you would get your deceased spouse's SS benefits would be if they were greater than your own... and you would only get the larger of the 2, not both. If you didn't pay into SS, for whatever reason, you would be entitled to her whole benefit under surviving spouse provisions.

    January 7, 2013 02:21 pm at 2:21 pm |
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