Debt considered a bigger problem than default
Image by SpeakerBoehner via FlickrThe debate over whether to raise the legal limit on government borrowing has riveted Americans, with a large majority worried about the potential consequences regardless of whether Congress votes to allow the national debt to keep increasing.It is perfectly rational to be more concerned about debt, because if we do not get control of it, a default will be inevitable regardless of the debt limit. That is the primary concern and the main benefit of the debt ceiling is to restrain the growth in spending, primarily by Democrats.
But when pressed to name their biggest concern, nearly half of respondents say they are alarmed by the prospect that the debt could grow beyond its current limit of $14.3 trillion, according to a new Washington Post-Pew Research Center poll. Only 35 percent say they are more worried about the risk of default and economic destabilization if Congress does not raise the debt limit.
The poll vividly illustrates the dilemma facing lawmakers as they approach an Aug. 2 deadline on the debt ceiling. While congressional leaders in both parties have acknowledged that the Treasury needs to keep borrowing to pay the government’s bills, lawmakers are likely to face voters’ wrath if they can’t prove that they are also working to rein in the spiraling debt.
On Tuesday, Vice President Biden emerged from a fourth round of debt-reduction talks with six lawmakers from both parties and announced that the group is on pace to reach an agreement on more than $1 trillion in spending cuts, part of a package aimed at smoothing passage of a debt-limit increase.
“I think we’re in a position where we’ll be able to get to well above $1 trillion [in cuts] pretty quick,” Biden told reporters after meeting with lawmakers for 21 / 2 hours at the Capitol.
The group agreed earlier this month to look more closely at proposed cuts, worth nearly $200 billion over the next decade, to a variety of programs. On Tuesday, it dove into the more contentious question of whether to cut Medicare and Medicaid, the biggest drivers of future borrowing — a top GOP priority. In return, however, Biden said he expects Republicans to back down on their opposition to new taxes.
“Revenues are going to have to be in the deal,” he said.
House GOP leaders, meanwhile, scheduled a vote for next week on a measure to raise the debt ceiling by $2.4 trillion without an accompanying debt-reduction package, a move intended to show that such legislation has no chance of passing. Speaker John A. Boehner (R-Ohio) has said that any debt-limit increase must be paired with a package of spending cuts that equals or exceeds the amount by which the debt ceiling is raised.
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I don't think a trillion is going to be enough of a cut, and Republicans would be foolish to give the Democrats more money to spend with tax increases. They cannot be trusted to keep their word on spending restraint. We have already been fooled before with their illusory promises of restraint.
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