January 6th, 2013
01:32 PM ET
2 years 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

    @ Larry L -

    I've been working since I was 14. I was 20 when I got the first job I've had that offered a 401(k). The employer matched 50% of the first 6% I put into the plan. I've been participating in a 401(k) ever since (I'm 51 now). My husband did the same... and let me point out that we're middle-class folks that raised 2 children. Over those 30 years, my and Mr. Fair's savings and our employer's match has grown into a sizeable nest egg for our retirement. Additionally, we both paid 6.2% into social security and our employers matched that as well. So tell me exactly WHY we should be means tested??? Because we did the right thing???? We could have been irresponsible and spent all of that money along the way. Believe me, if we could manage to save, there's no reason anyone else could not have. We had bills, we had a mortgage, we had all of the same expenses that everyone else has. But when the money came in, we paid our retirement FIRST.

    January 7, 2013 12:35 pm at 12:35 pm |
  2. Sniffit

    "Just the fact that the GOP is out there threatening another manufactured debt ceiling crisis is already driving the stock market down. When will they finally realize that their "bluster" and "bull" has real consequences?"

    Newsflash: it's a feature, not a bug. They're doing it ON PURPOSE.

    January 7, 2013 12:35 pm at 12:35 pm |
  3. SuperD

    After reading all these posts, I just have to laugh and see that we have a DEM president, and half of a DEM Congress and neither of them are responsible for any of this!

    Btw, if you do actually work, enjoy less pay in your paycheck, remember, YOU voted for this. THIS is what YOU wanted.

    January 7, 2013 12:36 pm at 12:36 pm |
  4. Rudy NYC

    Fair is Fair wrote:

    Oh, but they do... in addition to the 6.2% withheld from a worker's paycheck, the employer matches that penny for penny. That's a total of 12.4% of gross earnings, which compounded over the typical 45-year working career, should be enough to comfortably retire on. The only problem is that we're talking about a government run system... in other words, completely screwed up.
    ---------------
    The problem with Social Security is the ration of donors to recipients: how many people are paying taxes toward the fund compared to how many people are drawing monthly checks. When the program was first begun, the ratio was around 5:1, contributors to recipients.

    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. Why don't many government employees pay the tax? Because when the policy was put in place, government employees were among the lowest paid and had the worst benefits in the job markets.

    January 7, 2013 12:40 pm at 12:40 pm |
  5. Name

    All the republicans are saying is that if we cut spending then we can use that money that we have saved and use that to pay on our debt.

    January 7, 2013 12:41 pm at 12:41 pm |
  6. REGinAz

    Per McConnell, "What we're saying here is the biggest problem confronting the country is our excessive spending."  But is that an accurate assessment or a distraction to just keep focus on one problem while irresponsibly and self-servingly allowing the continuation of what really caused our drastic problems?  "Big government", government spending and the deficit are all problems needing to be addressed, problems that aggressively grew as necessary responses to problems initiated under Bush-Cheney, problems that would be allowed to repeat should their source be ignored.  We need to get excited about cutting the deficit and controlling spending but being totally focused there and being blind to the irresponsibility and self-serving efforts to return to "more of the same", Bush-Cheney style, which can only result in "more of the same" is ludicrous.  Each of our costly problems were the result of exploitation by the few, allowed by permissive policies, encouraged by co-responsible politicians, resulting in run-away greed, gross dishonesty and self-indulgence with the few always walking away with substantial gains and the country, the majority left with the significant costs – "puppet" politicians catering to "the money" and together their taking the people for granted as easily conned and as just "pawns" is the real costly problem that the people really need to firmly reject.

    January 7, 2013 12:43 pm at 12:43 pm |
  7. Anthony

    Goose66, debt ceiling predates Obama. The first debt ceiling was created in 1917. It has been raised more than 100 times since 1940. It was raised 18 times under Reagan, and 7 times under George W. Bush. It does not have any actual purpose.

    January 7, 2013 12:47 pm at 12:47 pm |
  8. amf140

    I paid my taxes. I paid my Social Security. I paid my Medicare. I saved for retirement. If I didn't do anything wrong, why do "I" have to fix it with means-testing, higher taxes and delayed retirement? I wasn't the one that mis-managed these programs. Actually I wish I had my and my employer's social security payments – so I could manage them and not the government. Economists can't figure out the economy. Why do Harvard lawyers think they can?

    It would be nice if these high-priced politicians ever decided to start governing one of these days.

    January 7, 2013 12:51 pm at 12:51 pm |
  9. Rudy NYC

    Goose66 wrote:

    What short-term memories these Democrats have. Have we all that quickly forgotten why a debt-ceiling was put in place to begin with? If the logic is that the debt ceiling is about already incurred debts and shouldn't be tied to discussion of cutting teh debt, then having a debt ceiling makes no sense. Why did Democrats vote for it in the first place? Are they somehow smarter or more logical now now than they were then? The answer is no – .........
    ------------
    I agree with you. The truth is just another talking point handed down from the White House so liberals and Democrats can have something to chatter about. Before you complain about Democrats creating a debt ceiling you need to brush up on your facts. The debt ceiling is older than any of us posting here.

    The truth is that the House is the only consitutionally authorized body to originate any and all revenue related bills. It is the House that orginates all spending, not the Senate. In fact, if the Senate modifies any revenue related legislation, it must go back to the House for a vote. All that the Senate can do is pass it unchanged, or send it back with amendments.

    What this means is that the House authorized the spending, all of it. Now they do not want to pay for it, and blame the President. Like I said, the Constitution authorizes only the House to originate and author any revenue related legislation.

    The debt ceiling has nothing to do with future spending, not unless the House plans on borrowing more money. The House has already passed legislation to spend more money...a whole lot more money. That is the truth of the matter.

    January 7, 2013 12:51 pm at 12:51 pm |
  10. Fair is Fair

    Rudy says:

    "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. Why don't many government employees pay the tax? Because when the policy was put in place, government employees were among the lowest paid and had the worst benefits in the job markets."
    --------–
    The ratio falling to 3:1 (and getting worse) has NOTHING to with the cap nor public sector workers. It has everything to do with (1) the fact that when SS was started in 1935, there were few people who lived past age 65 and (2) people were having more children, thus always having more people paying into the system than drawing off of it.

    January 7, 2013 12:52 pm at 12:52 pm |
  11. DumbasRocks [R]s

    California Gary says, "Is there no longer a voice of reason in the GOP?"

    Most who are paying attention can tell you that train left the station, quietly under the cover of darkness, many years ago.

    I was once a [R]. But the [R] party has now run so far amuck that once-solid conservative traits such as 'reason' and 'cogent analysis' are now actually maligned by the deluded drama queens who support and run the party. It is now the party of intellectual malignancy, as anyone can see from the vapid posts put on here by the new [R] acolytes.

    January 7, 2013 12:56 pm at 12:56 pm |
  12. Woman In California

    Btw, if you do actually work, enjoy less pay in your paycheck, remember, YOU voted for this. THIS is what YOU wanted.

    ____

    Yes, I DID. Maybe it's silly but in 15-20 years when I retire, (am in my 60's and no longer able to get the best jobs), I want to have some of what I've been paying into for the last 30 years and THIS president seemed to understand and care about that. Again, maybe I'm being silly.

    January 7, 2013 01:03 pm at 1:03 pm |
  13. Rudy NYC

    Anthony

    Goose66, debt ceiling predates Obama. The first debt ceiling was created in 1917. It has been raised more than 100 times since 1940. It was raised 18 times under Reagan, and 7 times under George W. Bush. It does not have any actual purpose.
    -------------–
    The debt ceiling serves a purpose. It streamlines the process of procurement using borrowed money. Without it, each and every separate expense or item that is procured through borrowed money would require a separate House vote for each and every separate item.

    January 7, 2013 01:03 pm at 1:03 pm |
  14. DumbasRocks [R]s

    Hey SuperD, I guess you like eating your own words. Because in 2007-2008, as people were being ejected from their jobs at a rate not seen since the last [R]-caused economic depression, and as your retirement accounts lost about half their value, and as the national debt balooned....my guess is that you should have been stunned to make the following self-reflection "remember, YOU voted for this. THIS is what YOU wanted."

    If you did not say this to yourself, would you please go find a [R] with half-a-brain so the rest of us might hold a half-way intelligent conversation with him?

    January 7, 2013 01:04 pm at 1:04 pm |
  15. DumbasRocks [R]s

    Hey Goose66, where was all this 'discussion' when the debt cieling was being raised MANY times to accomodate Reagan's , Bush 1's and Bush 2's spending priorities??? Well?

    It is not the [D] talking points that are the problem - the problem is the blatant, empty-headed rightwing hypocrisy being shown by the House [R]s. It is not the "talking points" that are new, it is the whole strategy of holding all of America hostage in an attempt to empower the ideologic fringe.

    Good luck with that. You've already lost the 2014 elections.

    January 7, 2013 01:09 pm at 1:09 pm |
  16. Wilson

    Back in the middle of the 19th century, things were getting better for the poor for the first time ever, what with the textile revolution and the railway revolution and steamships and all. But suppose you were a political activist, thirsting for power and meaning. ... That's when Karl Marx had his brilliant idea. Why not divide the masters from the workers, and win votes from the workers by demonizing the masters and plundering their wealth? Why not tell the capitalists 'you didn't build that'? Divide and conquer. What could go wrong? What could go wrong, Mr. President, is Reynolds's Law. 'Things that can't go on forever, won't. Debt that can't be repaid, won't be. Promises that can't be kept, won't be.' What could go wrong is that the educated ruling class would make a mess of everything it meddled with: health care, pensions, education, housing, green energy, the dollar. For what? Democratic politicians are never going to come up with an entitlement reform plan and warn their senior voters and their moms with disabled kids. When the Democratic voters are reduced to eating the paint off the walls, they just want to be able to say that the Republicans did it

    January 7, 2013 01:12 pm at 1:12 pm |
  17. Donna

    Anthony
    Goose66, debt ceiling predates Obama. The first debt ceiling was created in 1917. It has been raised more than 100 times since 1940. It was raised 18 times under Reagan, and 7 times under George W. Bush.
    =========
    What happened in the past is irrelevant. Obama has run up record deficits and debt in record time and is projected to do it for another 4 years. The country now stands at the limits of its borrowing capacity. If interest rates increase even slightly our interest payments on the debt will force massive tax increases or spending cuts to pay for the added interest cost. I'm not sure why liberals and Democrats think the country can borrow, tax and spend endless amounts of money with no ill effect.

    >It does not have any actual purpose.

    I fear you are serious. Your statement indicates total cluelessness with regards to fiscal and financial matters.

    January 7, 2013 01:13 pm at 1:13 pm |
  18. Rudy NYC

    Fair is Fair wrote:

    The ratio falling to 3:1 (and getting worse) has NOTHING to with the cap nor public sector workers. It has everything to do with (1) the fact that when SS was started in 1935, there were few people who lived past age 65 and (2) people were having more children, thus always having more people paying into the system than drawing off of it.
    -------------------
    The ratio didn't drop below 4.5:1 until the 1970s and 1980s when our manufacturing jobs began being shipped overseas. While people may live longer, the number of employed people grows along with them.

    Yes, the ratio is dropping, just as it has been for decades. The 2000s saw 9 million manufacturing jobs leave this county, most likely for good. When it dips below 2.5, the system will no longer be able to sustain itself.

    January 7, 2013 01:13 pm at 1:13 pm |
  19. 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.

    I actually disagree with that idea. The cap does limit contributions, but the cap is not the problem. 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.

    January 7, 2013 01:18 pm at 1:18 pm |
  20. Barner

    Unless they get $1 cuts for each increase forget it. I have heard from my congressman that rather than forcing a deal they may just go with monthly debt ceiling increases. There is no other way to deal with the Spendthrift and Chief. Manafactured or not its time to treat Obama to his own medicine. Making it a monthly beating is the way to go. Draw it out, go over, who cares just make it painful until we get cuts. And leave the sequester in place – defense or not its going to hit the other programs that need it significant paring. They got their tax increase now we need to Cut cut cut until its painful.

    January 7, 2013 01:19 pm at 1:19 pm |
  21. m

    Why do we have Republicans?? What good are they???

    January 7, 2013 01:22 pm at 1:22 pm |
  22. Sniffit

    "All the republicans are saying is that if we cut spending then we can use that money that we have saved and use that to pay on our debt."

    That's not at all what they're saying. DOES NOBODY PAY ANY ATTENTION AT ALL?

    January 7, 2013 01:24 pm at 1:24 pm |
  23. 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.

    I actually disagree with that idea. The cap does limit contributions, but the cap is not the problem. 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.
    ------–
    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.

    January 7, 2013 01:33 pm at 1:33 pm |
  24. California Gary

    @sniffit & dumbasrocks.......I know they are doing it on purpose, and I know the "train of reason" left the GOP station quite some time ago.......I'm only pointing out the folly of their actions, the harm they do, and then hoping there are at least a few remaining folks with the "R" behind their name that can start a counter movement to take their party back from the teaparty radicals that currently have them in a chokehold. Wishful thinking maybe.......

    January 7, 2013 01:34 pm at 1:34 pm |
  25. Tommy G

    A balanced budget amendment is the ONLY solution. Obama and the Democrats have no intention of EVER cutting spending as that money represents their power. They want to use your money, and your kids and grand kids money, to create a leftist utopia in America. One where everthing is "free", or more accurately, one where others pay for things. Democrats have turned government and the taxes collected into legalized theft.

    January 7, 2013 01:35 pm at 1:35 pm |
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