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Debt ceiling crisis: another day without resolution as the clock ticks

The political dance over the US debt ceiling crisis and federal deficits continued Sunday with the possibility that top lawmakers could be summoned to the White House for more negotiating – although no meeting had been scheduled.

Positions were clarified (or at least reiterated) on the morning TV talk shows as the clock kept ticking toward the Treasury Department’s August 2 deadline for raising the US debt limit in order to avoid Uncle Sam’s not being able to pay some bills.

The run-up to that Perils-of-Pauline moment is unlikely to include two very large discussion points: The grand plan for tackling the nation’s deficit and debt – a $4 trillion package over 10 years – once being seriously discussed by President Obama and House Speaker John Boehner. (Remember those halcyon days?) And the effort by some Republicans to leap-frog to a balanced budget amendment to the US Constitution. Not going to happen in the Democrat-controlled Senate.

National debt ceiling 101: Is a crisis looming?

Meanwhile, the political ground continues to shift as credit rating agencies, state governors, and independent voters weigh in on budgets, debt, and taxes.

Americans like lower taxes. No surprise there. Sixty percent cheered when Obama and congressional Republicans last year agreed to extend the Bush-era tax cuts, according to the Pew Research Center.

“But most also acknowledge that the best way to reduce the deficit is through a combination of cuts in major programs and tax increases,” Pew reported recently. “And a large majority (66 percent) approves of raising taxes on incomes of $250,000 or more to reduce the debt.”

So when Obama talks about “millionaires and billionaires doing their fair share,” he seems to have most of the public with him.

But among all-important independent voters, the debt/deficit issue has become trickier for elected officials concerned about the political fallout of however they vote.

Back in May, independents by a 15-point spread (49-34 percent) told Pew they were more concerned that raising the debt limit “would lead to more spending and bigger debt.” Now, independents are just as likely (45-46 percent) to worry that “not raising it would force a default and hurt the economy.”

Poll-reading lawmakers are moving in that direction as well – particularly when they consider (as CBS News put it) that “credit rating agencies are putting the Treasury Department under the gun as they decide whether to strip the US of its coveted triple-A credit status.”

Both Moody’s Investors Service and Standard and Poor’s have warned that they could downgrade the country’s triple-A credit rating, and the Washington Post reports that “the Obama administration has mounted an intense behind-the-scenes campaign to keep the nation’s major credit rating companies from issuing threats that they might downgrade the United States over the swelling size of the federal debt.”

“There might be a fringe who believes that playing with Armageddon is a good idea, but I don’t think that’s where the majority will be,” White House budget director Jacob Lew told CNN’s State of the Union Sunday morning.

That “fringe” includes a substantial number of freshman GOP House members philosophically opposed to raising the debt ceiling under any circumstances – locked into a position that Speaker Boehner is trying to talk them out of.

But it does not include many governors – Republican as well as Democrat – who see the dangers of defaulting on US debt obligations.

“It would be an embarrassment for the United States of America to default on its obligations,” Virginia Governor Bob McDonnell (P) told the Reuters news agency at a meeting of the National Governors Association in Salt Lake City Saturday.

“I really think we need more statesmen and less politicians in Washington right now because it is a situation that must be solved,” Alabama Governor Robert Bentley (R) said in another Reuters interview.

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Comments (1)

  1. Submitted by Deb Reed on 07/18/2011 - 09:00 am.

    This deal has just created new problems! Nothing solved at all! GOP, GOODBYE!

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