Debt Limit Showdown Looms on the Horizon

Posted on January 11, 2011. Filed under: Uncategorized |

Despite the heated and highly partisan calls to repeal health care reform, or short of that, gut the legislation, the real fight on Capitol Hill will center on the debt limit.

You better believe that the next few weeks won’t be for the faint of heart as lawmakers prepare to play a dangerous game of chicken. And it’s anybody’s guess as to who blinks first.

Treasury Secretary Timothy Geithner warns that the debt ceiling that now stands at $14.3 trillion could be reached by the end of March. However, House Speaker John Boehner (R-OH) has already vowed not to increase the national debt ceiling, which enables the country to meet its financial obligations, without first making significant spending cuts.

But are the Republicans in Congress—including newly elected tea party-backed lawmakers—really willing to let the nation default on its debt and risk world-wide financial chaos? That will be the question at the heart of the debt limit showdown coming our way.

According to the Los Angeles Times the U.S. has never failed to raise the debt ceiling, in fact it has done so 75 times since 1962, the last time in February 2010. However, some of the GOP’s most conservative members have said they won’t vote to raise the debt limit, saying to do so would be to ignore the voters’ demand for debt reduction.

It’s clear that House Republicans aren’t going to wait for the normal budget process or even the President’s State of the Union address at the end of January to press for spending cuts. It is expected that they will send the Senate weekly spending cuts, which will be all but ignored by that Democratic-controlled body.

Likely to be undaunted by the anticipated Senate snub, Republicans will next set their sights on the President’s FY12 Budget slated to be released on February 14 and on another continuing resolution, which will replace the one voted on in late December and is set to expire on March 4.

Still it’s the debt ceiling that provides the strongest point of leverage for the GOP. With the White House needing to raise the debt limit to avoid, in the words of Geithner – “catastrophic economic consequences” – compromise on spending cuts is inevitable.
What remains to be seen is how the tragic and terrible shootings in Arizona that left six people dead and several others fighting for life, including Congresswoman Gabrielle Giffords (D-AZ), will impact the tenor of discourse on the Hill going forward.

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