WASHINGTON (Reuters) - House of Representatives Speaker John Boehner on Sunday said that the United States must continue meeting its obligations to fund government debt or risk a global financial disaster.
With the Treasury Department rapidly coming closer to bumping up against its statutory borrowing limit of $14.3 trillion, some of Boehner’s fellow Republicans in Congress have suggested that no further borrowing should be authorized until deep cuts are made in federal spending.
Boehner, interviewed on “Fox News Sunday,” was asked about the impact of a government default if the limit on its borrowing authority was not raised in a timely way.
“That would be a financial disaster not only for our country, but for the worldwide economy,” Boehner responded. He added, “Remember, the American people on Election Day said we want to cut spending and we want to create jobs. You can’t create jobs if you default on the federal debt.”
Treasury Secretary Timothy Geithner has estimated that unless Congress acts to increase the debt ceiling, his agency will run out of borrowing authority sometime between March 31 and May 16.
At that point, the government could default on some loans.
Last week, the Treasury Department initiated the first in what is expected to be several stop-gap moves to delay hitting that $14.3 trillion limit on credit.
Even as he pressed for cutting government spending, Boehner said of the notion of Republicans forcing a government default: “I don’t think it’s a question that is even on the table.”
The U.S. debt — the amount of accumulated government borrowing — has been rapidly rising to a level that many economists say is potentially dangerous.
The nonpartisan Congressional Budget Office noted last week that debt held by the public will most likely jump from 40 percent of GDP at the end of fiscal 2008 to nearly 70 percent at the end of this fiscal year.
The CBO last week estimated that this year’s deficit will hit nearly $1.5 trillion, further worsening the debt problem.
Boehner and fellow Republicans have urged cutting back federal spending to fiscal 2008 levels, which they say would save about $100 billion a year.
During his interview on Fox News Sunday, Boehner said, “There is no limit to the amount of spending we’re willing to cut.”
In his State of the Union speech to Congress last week, President Barack Obama tried to answer Republican calls for spending cuts by offering up a five-year freeze on some spending, which he said would save about $400 billion.
But neither the Republican plan nor Obama’s would produce anywhere near enough in long-term savings to solve the nation’s severe fiscal problems.
Both Boehner and Senate Republican leader Mitch McConnell on Sunday urged bipartisan talks with the Obama administration to address those long-term problems, which will only grow as an aging U.S. population requires more federal retirement benefits and government-backed healthcare.
McConnell, on NBC’s “Meet the Press,” would not say, however, whether he would consider tax increases — a remedy that many Democrats and private analysts say must be included.
When Fox News Sunday asked Boehner about hiking taxes, he responded, “Now, here you’re getting — you’re getting right in the same old nonsense we’ve always gotten into.”
White House Chief of Staff William Daley, interviewed on CBS News Face the Nation, said that raising taxes now, with the U.S. economy still trying to recover, was not “the way to go at this point.”
While he said the Obama administration wants to sit down with congressional leaders to work on deficit problems, “The reality is ... there is no way they (Republicans) are going to look for any revenue raising in any way, shape or form” for the long-term. “That puts a tremendous constraint on obviously the budget and the deficit,” Daley said.