Debt ceiling vote could spark first GOP firefight
- Article by: JEREMY HERB
- Star Tribune
- January 30, 2011 - 10:07 PM
WASHINGTON - A looming revolt against raising the national debt limit has opened the first visible rift between the new GOP leadership in the U.S. House and a faction represented by House Tea Party Caucus leader Michele Bachmann.
The Minnesota Republican also has received high-profile backing from former Gov. Tim Pawlenty, who has made opposition to raising the debt ceiling part of his likely presidential campaign.
On the other side of the argument are a majority of Democrats and Republican leaders, including House Speaker John Boehner of Ohio, who say reality dictates raising the country's $14.3 trillion debt ceiling or facing a U.S. default. That limit could be reached as soon as March 31, forcing what Boehner has called the first major vote that lawmakers must handle "as adults."
The Obama administration warns that not raising the debt limit would spark catastrophe should the country default on its loans, triggering an economic collapse worse than the 2008 financial crisis and lasting for decades.
But Bachmann and her allies have stood firm against authorizing more debt, one of the central Tea Party issues in November's elections that turned the House over to the GOP. She has circulated a petition with 150,000 signatures against raising the limit, along with proposed spending cuts of more than $400 billion.
Even cuts of that magnitude would not solve the problem. To avoid default without raising the debt limit would require a balanced budget -- equivalent to cutting about 40 percent of the nation's budget, more than $1 trillion, according to University of Minnesota economist Chris Phelan. Set by Congress, the debt ceiling is defined simply as the upper limit of debt the U.S. government can owe. It has been raised dozens of times over the past few decades under Republican and Democratic administrations, including numerous times under the past three presidents.
"There's always been a fight, but they've always blinked and done it," Phelan said. "U.S. debt is considered a risk-less asset because it's almost been considered impossible for the U.S. to default. It has to choose to default."
News that the deficit will hit $1.5 trillion this year has increased the volume of calls that U.S. debt is out of control. Even Republicans who support raising the borrowing limit say that the vote should be accompanied by spending cuts.
President Obama has acknowledged that reality, calling for a five-year freeze on discretionary spending in his State of the Union. Republicans, however, want to reduce discretionary spending to 2008 levels.
"Politicians only make hard choices when their backs are against the wall," said Pawlenty's spokesman Alex Conant. "So this issue of raising the debt limit is a moment where we can force the Congress and the president to make the necessary hard choices about our country's fiscal future."
The Democratic National Committee has been quick to point out that Pawlenty left his own state facing a projected deficit of $6.2 billion.
U.S. Rep. Erik Paulsen said he thinks Congress will raise the debt limit, but not before cuts are made. "Raising the debt ceiling without cutting spending is simply unacceptable," the Minnesota Republican said. U.S. Rep. John Kline -- a close ally of Boehner -- says that spending cuts must come before talk of raising the limit. Minnesota's freshman Republican, U.S. Rep. Chip Cravaack, has yet to take a public position.
Challenge from the right
As GOP House leaders negotiate with the White House, they'll have to contend with an increasingly aggressive right flank.
Bachmann has said that even though Congress has raised the limit before, "We cannot have a knee-jerk reaction, which is to continually raise the debt ceiling." She has said she does not want the U.S. government to default, but she declined to say whether she would drop her opposition to avoid such a scenario.
Pawlenty has said Congress could get several additional months of breathing room by restructuring its payments so that debt was paid before most other obligations -- excluding the military. That, he said, would avoid default for at least several months, giving lawmakers the chance to reform entitlements like Social Security and Medicaid, something Congress isn't even close to doing.
Pawlenty noted that as a senator in 2006, Obama voted against raising the debt limit.
But Democrats, who are resistant to across-the-board cuts, say the current opposition to raising the debt limit is little more than political posturing.
"Proposing it kind of signals a certain lack of seriousness," said U.S. Sen. Al Franken, a Democrat. "It would be a disaster of untold proportions."
Jeremy Herb • 202-408-2723
© 2014 Star Tribune