Debt Ceiling Taking Center Stage As Shutdown Continues

By: CBS
By: CBS
The federal government shutdown and looming deadline to raise the debt ceiling have merged into one major problem on Capitol Hill.

Credit: CBS

The federal government shutdown and looming deadline to raise the debt ceiling have merged into one major problem on Capitol Hill, though neither issue has a resolution in sight as the government shutdown heads into its second week.

Democrats and Republicans dug further into their respective positions Monday: Republicans are calling on Democrats to negotiate over a short-term spending bill and a debt-ceiling increase, and President Obama says he is ready to negotiate over any topic - once the Republicans pass legislation to re-open the government and raise the U.S. borrowing limit without any conditions.

Senate Democrats have begun working on a bill that would just raise the debt ceiling and not change any other policy. It's unclear how many Republicans would vote for such a bill, but Senate Majority Whip Dick Durbin, D-Ill., acknowledged Monday that they would need bipartisan support. Because of procedural rules that govern the Senate, the votes might not start until the end of the week.

The U.S. is slated to run out of ability to borrow money on Oct. 17. On CBS' "Face the Nation" Sunday, Treasury Secretary Jack Lew warned that "nothing good" will come if Congress fails to raise the debt ceiling and cannot pay its bills.

The current debt limit is $16.7 trillion dollars. The U.S. technically exceeded that number in May, but Lew has been able to use extraordinary measures to make sure other bills are paid on time. If the limit is not raised, the government will have to withhold payments like Social Security, Medicare and Medicaid checks. It would also jeopardize the flow of credit around the world.

According to a Pew poll released Monday, the number of people who believe it is absolutely essential the debt ceiling be raised is 47 percent, up seven points from July 2011, the last time the U.S. came close to a default. But thirty-nine percent of people say that a default on the debt would not cause major economic problems.

Whether you believe it is necessary to raise the debt ceiling may depend on your political leanings. Sixty-two percent of Democrats think it is absolutely essential to increase the debt limit, Pew found, compared with forty-five percent of independents and thirty-six percent of Republicans. Tea party Republicans in particular do not see a debt limit hike as critical: only 23 percent said it was.

During a visit to the Federal Emergency Management Agency Monday, Mr. Obama called on House Speaker John Boehner, R-Ohio, to extend the nation's borrowing authority and to restore government funding with "clean"bills. Boehner said on ABC's "This Week" Sunday that not enough votes in the House to do either without concessions by Democrats.

Mr. Obama and Senate Democrats disagree. "There are enough Republican and Democratic votes in the House of Representatives right now to end the shutdown immediately," he said. If there aren't, then Boehner and the Republican House leadership "should prove it," Mr. Obama added.

A CBS News estimate reveals that there are 215 House members - 200 Democrats and 15 Republicans - who would vote to end the shutdown if Boehner was to put a "clean" budget bill up for a vote. That's two short of a majority.

Republicans have asked for negotiations to both restore funding to the government and raise the debt ceiling. Mr. Obama reiterated a promise to negotiate over a range of topics, including healthcare and energy policy, but only after the government is reopened and the debt ceiling increased.

"We're not going to negotiate under the threat of further harm to our economy," he said.

But when Boehner came to the floor Monday afternoon, he had nothing to say about the president's demands. Instead, he repeated calls for negotiations. "Mr. President, it's time to have that conversation before our economy is put further at risk," Boehner said.

The American people appear just as divided as their leaders. Forty-four percent of people surveyed in the Pew poll say Republican leaders should give in on their demand that a budget deal include cuts or delays to the Affordable Care Act. An almost equal number, 42 percent, say Mr. Obama should agree to changes to the law.

On top of that, 58 percent of Democrats say it is unacceptable for Mr. Obama to agree to any cuts or delays. Fifty-four percent of Republicans say the same of the GOP: it would be unacceptable for them to agree to a deal that does not include cuts or delays to Obamacare. That number rises among tea party Republicans, 88 percent of whom say Mr. Obama should agree to cuts and delays and 72 percent of whom say it would be unacceptable for GOP leaders to accept anything less than a delay in implementation or slashed funding for the law.

Gene Sperling, a senior Obama economic adviser, indicated Monday morning that the White House might be open to a short-term extension on increasing the debt ceiling once Treasury Secretary Jack Lew exhausts all other options.

"There's no question that the longer the debt limit is extended, the greater economic certainty there will be in our economy which would be better for jobs, growth and investment," Sperling said at an event sponsored by Politico. "That said, it is the responsibility of Congress to decide how long and how often they want to vote on doing that."

White House spokesman Jay Carney told reporters later in the day that the president is not asking for the debt ceiling to be raised for a specific period of time, only that it be raised "without drama or delay." They are supportive of the Senate Democrats' efforts, he added.


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