White House encouraged at House plans for clean debt cap rise

WASHINGTON Fri Jan 18, 2013 3:11pm EST

A volunteer adjusts a sign at the America Presidential Experience exhibit during the Democratic National Convention in Charlotte, North Carolina September 4, 2012. REUTERS/Adrees Latif

A volunteer adjusts a sign at the America Presidential Experience exhibit during the Democratic National Convention in Charlotte, North Carolina September 4, 2012.

Credit: Reuters/Adrees Latif

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WASHINGTON (Reuters) - The White House on Friday said it welcomed plans by Republicans in the U.S. House of Representatives to raise the government's debt ceiling, as long as they do not condition the increase on spending cuts.

"We are encouraged that there are signs that congressional Republicans may back off their insistence on holding our economy hostage to extract drastic cuts in Medicare, education and programs middle class families depend on," White House spokesman Jay Carney said in a statement. "Congress must pay its bills and pass a clean debt limit increase without further delay."

The House will consider a bill next week to extend the debt limit by three months in order to force the Senate to pass a budget, Republican House Majority Leader Eric Cantor said on Friday.

The White House has been skeptical about any short-term increase in the nation's borrowing limit if it were used as a bargaining wedge to force the administration into accepting spending cuts later on. The administration has insisted that while it is willing to discuss reducing government outlays, it will refuse to negotiate over raising the debt ceiling.

Carney renewed the administration's call on Congress to raise the debt independently of other fiscal dealings.

"The President has made clear that Congress has only two options: pay the bills they have racked up, or fail to do so and put our nation into default," he said. "The President remains committed to further reducing the deficit in a balanced way."

Less than three weeks after the White House and Congress averted the severe combination of tax increases and spending cuts that came to be known as the "fiscal cliff," fresh budget deadlines loom. As with the fiscal cliff, failure to act has the potential to cause a number of serious economic dislocations: a U.S. debt default, a government shutdown, further deep spending cuts to defense and non-defense programs alike.

The most immediate and most serious of the three budget bottlenecks is the need to raise the $16.4 trillion U.S. debt limit so the Treasury can continue to borrow to fund government obligations. The Treasury has said it will run out of options to allow it to borrow in mid-to-late February, raising the specter of a financial market-roiling debt default.

(Reporting by Roberta Rampton, Jeff Mason, Steve Holland and Mark Felsenthal; Editing by Vicki Allen)

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Comments (4)
jaham wrote:
Oh, how I wish we had THIS Barrack Obama as President:

“Mr. President, I rise today to talk about America’s debt problem. The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our government’s reckless fiscal policies. Over the past five years, our federal debt has increased by $3.5 trillion to $8.6 trillion. That is ‘‘trillion’’ with a ‘‘T.’’ That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next five years, between now and 2011, the president’s budget will increase the debt by almost another $3.5 trillion. Numbers that large are sometimes hard to understand. Some people may wonder why they matter. Here is why: This year, the federal government will spend $220 billion on interest. That is more money to pay interest on our national debt than we’ll spend on Medicaid and the State Children’s Health Insurance Program. That is more money to pay interest on our debt this year than we will spend on education, homeland security, transportation and veterans benefits combined. It is more money in one year than we are likely to spend to rebuild the devastated gulf coast in a way that honors the best of America. And the cost of our debt is one of the fastest growing expenses in the federal budget. This rising debt is a hidden domestic enemy, robbing our cities and states of critical investments in infrastructure like bridges, ports and levees; robbing our families and our children of critical investments in education and health-care reform; robbing our seniors of the retirement and health security they have counted on. Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities. Instead, interest payments are a significant tax on all Americans — a debt tax that Washington doesn’t want to talk about. If Washington were serious about honest tax relief in this country, we would see an effort to reduce our national debt by returning to responsible fiscal policies. But we are not doing that. Despite repeated efforts by Senators Conrad and Feingold, the Senate continues to reject a return to the commonsense pay-go rules that used to apply. Previously, pay-go rules applied both to increases in mandatory spending and to tax cuts. The Senate had to abide by the commonsense budgeting principle of balancing expenses and revenues. Unfortunately, the principle was abandoned, and now the demands of budget discipline apply only to spending. As a result, tax breaks have not been paid for by reductions in Federal spending, and thus the only way to pay for them has been to increase our deficit to historically high levels and borrow more and more money. Now we have to pay for those tax breaks plus the cost of borrowing for them. Instead of reducing the deficit, as some people claimed, the fiscal policies of this administration and its allies in Congress will add more than $600 million in debt for each of the next five years. That is why I will once again co-sponsor the pay-go amendment and continue to hope that my colleagues will return to a smart rule that has worked in the past and can work again. Our debt also matters internationally. My friend, the ranking member of the Senate Budget Committee, likes to remind us that it took 42 presidents 224 years to run up only $1 trillion of foreign-held debt. This administration did more than that in just five years. Now, there is nothing wrong with borrowing from foreign countries. But we must remember that the more we depend on foreign nations to lend us money, the more our economic security is tied to the whims of foreign leaders whose interests might not be aligned with ours. Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.”

- Senator Obama , March 16th, 2006

Jan 18, 2013 3:18pm EST  --  Report as abuse
tbro wrote:
Agreed jaham! After a year into his first term, I was starting to realize he was long on rhetoric and short on follow through. Your post here is a great example of why, and one of many. I voted for him a second time only because the alternative was as abysmal, if not worse, than 2008′s choice of McCain and Palin. Starting in 1992, leadership seems to have left the room in politics.

Jan 18, 2013 4:53pm EST  --  Report as abuse
DeanHo wrote:
Oh, how I wish those that post items like Jaham did actually to the context of what is said rather than just bits from the speak. Granted I will give Jaham for posting the whole speech but zero credit for reading and understanding the speech.

Senator Obama’s March 16th, 2006 comments at that time were regarding the Iraq war, at to a lesser extent the Afgan War. Our debt has gone up $3.8T in 5 years. He did foresee the problem with our mounting debt. As Reuters and US News point out, “The Center for Budget and Policy Priorities has estimated that the wars in Iraq and Afghanistan, together with the Bush tax cuts, will account for almost half of the projected $20 trillion debt in 2019.” This was the point of Senator Obama’s March 16th, 2006 comments.

Today people like Jaham still don’t understand the cost of what happened before to our current situation. Jaham you need to realize that the popular phrase you love to use “Freedom isn’t free” applies to this situation. This rings true and can only be done in 2 possible ways.

(1)SERVICE! Men and Women have been paying for freedom by putting their lives on the line and paying for your freedom by serving. I was one of them. Four different combat zones in my 10 years of services for my country and I take pride in offering the ultimate price for my country. I also cherish not having lost my life during that time.
(2)TAXES! Pay the taxes you need to support your intention. If you wanted or support the war effort then pay your taxes. Pay more if they ask you to! Because you have to remember ‘Freedom Isn’t Free’ and the bills need to be paid.

The current majority of the HR does not seem to understand that their bills from the last 13 years (plus every year before that!) need to be paid. They refused all efforts to pay for the war they wanted and deny those bills are the reason. They refuse to extend the ability to pay the bills they wanted and want to be responsible for another drop in our countries credit rating. You complain about the economics of a country like Greece but only guide us in the same direction. The US House of Representative is charged with the responsibility of control our countries taxes & finances and yet wish to default and remove them at all costs. In 2006 Senator Obama saw the road ahead….now when you are faced with the reality of it…you hide behind a veil of ignorance and finger-pointing at opposition rather than remembering “FREEDOM ISN’T FREE.”

I gladly served and I gladly pay all the taxes it takes, because I would never sully the memory of those who fought, those who were wounded, and those who have died. You shouldn’t either!!!

Jan 18, 2013 4:58pm EST  --  Report as abuse
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