Tags: Barack Obama | Economic- Crisis | Debt | hike | short-term | Obama | House

Short-Term Debt-Limit Hike May Emerge as Temporary Solution

By    |   Thursday, 21 July 2011 12:25 PM

House Republican leaders and the Obama administration finally may have found common ground on a way out of the debt ceiling/deficit quagmire.

The GOP House leadership is contemplating a short-term increase of the $14.3 trillion debt limit in exchange for immediate spending to more than offset the hike.

And the White House indicated Wednesday that President Barack Obama would support a short-term extension of a few days — if both parties in Congress can accomplish a broader deficit reduction deal. The idea would be to give the plan more time to pass in Congress.

“If both sides agree to something significant, we will support the measures needed to finalize details,” said White House press secretary Jay Carney.

The federal government will need to start issuing more debt by Aug. 2 if it wants to continue paying all its bills, according to the Treasury Department.

House Speaker John Boehner broached the possibility of a short-term debt-ceiling hike in a meeting with House Republican freshmen Wednesday, sources told Politico.

The talks on a limited-duration debt deal came a day after the Senate “Gang of Six” announced a $3.7 trillion deficit-reduction proposal that received some support from both parties. But it would be difficult for Congress to approve such a broad package by Aug. 2.

Meanwhile, Senate Majority Leader Harry Reid is working with Senate Minority Leader Mitch McConnell on a plan to give the president authority to raise the debt limit. The duo is working on adding spending cuts to the plan to make it more palatable to Republican deficit hawks.

As for the Gang of Six solution, “Let’s be honest about this. It is not written, it is not scored,” said Senate Minority Whip Richard Durbin. “We are now down to 12 days. It is not practical. And it doesn’t add up to think that we could write it, score it, bring it to the Senate, pass it, send it to the House, entertain a conference committee and do all this by Aug. 2. No.”

But by relaxing Obama’s previously firm opposition to a short-term extension, the White House put the pressure squarely on Congress to consider the G-6 proposal.

House Majority Leader Eric expressed his willingness to consider incremental increases in the debt limit during a recent meeting with Obama.

A short-term deal would meet Boehner and Cantor’s longstanding insistence that any debt limit increase must be accompanied by equal spending cuts.

The main political question is whether House Republicans will agree to any deal that can be interpreted as raising taxes. While Boehner has indicated interest in a deal that raises revenue by simplifying rates and closing loopholes, Cantor and House Budget Committee Chairman Paul Ryan are more circumspect.

“I am concerned with the Gang of Six’s revenue target,” Cantor said.

Ways and Means Committee Chairman Dave Camp has mixed emotions on the G-6 plan, just like the others House Republican heavies.

“I think it’s a positive development that there’s some bipartisan approach to addressing the debt limit, and I like the fact that there’s lower rates,” he told The Hill. “But I’m concerned about the revenue that’s raised that isn’t because the economy’s growing but because there’s a tax increase.”

G-6 member Sen. Saxby Chambliss, R-Ga., says the basic problem is that “the House has got people who are dug in. He (Boehner) has got a certain number of them who campaigned on not voting to raise the debt ceiling,” Chambliss told The New York Times.

He estimates that as many as 60 House members won’t vote to increase the debt limit under any circumstances.

On the Democratic side, Senate Banking Committee Chairman Kent Conrad, another G-6 member, expressed support Thursday for a six-month debt-limit extension to allow more time for negotiations on the gang’s plan.

“The forces for the status quo are fully arrayed against us. They’re saying don’t do anything. That’s not a viable position,” he told MSNBC. “Those who are saying don’t touch Medicare, don’t touch Social Security, don’t touch revenue . . . how are you going to solve this problem if you don’t touch spending and you don’t touch revenue?”

In a later interview on CNBC, Conrad went after conservatives who won’t support the plan. This notion that it doesn’t add up, it’s just poppycock,” he said. “Why would three Republicans, three of the most conservative members of the body, be part of a plan that doesn’t add up? It’s just that some who are critics haven’t been bothered to get briefed about how it adds up.”

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House Republican leaders and the Obama administration finally may have found common ground on a way out of the debt ceiling/deficit quagmire. The GOP House leadership is contemplating a short-term increase of the $14.3 trillion debt limit in exchange for immediate spending...
Thursday, 21 July 2011 12:25 PM
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