President Obama met with reporters during a White House press conference yesterday as the media spotlight moves back to Washington D.C., searching for new signs that U.S. lawmakers are working cooperatively to avert the next fiscal challenge over the U.S. debt ceiling.
At stake is the serious question about whether the $16.4 trillion U.S. debt ceiling will be raised in time to allow the U.S. Treasury to pay off government spending that was approved earlier from Congress and is due before the U.S. government loses its borrowing authority sometime between mid-February through March 1st, 2013.
Technically speaking, the U.S. already reached its debt ceiling limit on December 31, 2012.
However, Treasury Secretary Timothy Geithner took decisive in mid-December, using “extraordinary measures” to the tune of $200 billion to temporarily extend the debt ceiling limit until the next deadline is reached on March 1st.
Although the not so long ago “fiscal cliff” showdown in late 2012 revealed some fresh Republican ideological divisions on Capitol Hill over fiscal-deal making, today many House Republicans still want Democrats and the White House to follow the fiscal path of deeper spending cuts in exchange for raising the debt ceiling in 2013.
Debt Ceiling Deja Vu
In July 2011 the U.S. debt ceiling issue captured the attention of global markets after it became clear that a political stalemate existed between House Republicans, Senate Democrats, and the White House over raising the debt ceiling.
In August 2011, House Republicans agreed to raise debt ceiling from $14.3 trillion to $16.4 trillion after a political impasse finally ended with Democrats succumbing at the last minute and accepting a Republican-inspired plan to cut federal spending, reduce the deficit, and put the United States on a more sustainable fiscal path.
After U.S. lawmakers agreed to raise the debt ceiling, Standard & Poor’s credit agency downgraded the U.S. from AAA credit rating, noting political gridlock in Washington and long term fiscal challenges as the basis for the downgrade.
“Not a deadbeat nation”
Yesterday when answering a question from NBC reporter Chuck Todd, President Obama insisted that the current debt ceiling issue is whether or not America pays its bills.
“We are not a deadbeat nation” Obama told reporters.
Obama pointed out that if the House and the Senate want to give him the authority so that they don’t have to take these tough votes to raise the debt ceiling, he is “happy to take it.”
But he later explained that if the House and Senate want to keep the responsibility of raising the debt ceiling, then “they need to go ahead and get it done.”
Obama bluntly said that America cannot afford another debate with this Congress about whether or not they
should pay the bills they’ve already racked up.
“We might not be able to pay our troops, or honor our contracts with small business owners. Food inspectors, air traffic controllers, specialist who track down loose nuclear materials wouldn’t get their paychecks. Investors around the world will ask if the United States of America is in fact a safe bet” he said.
Steering the public debate about the debt ceiling away from the perception that raising the debt ceiling equates to reckless future spending, Obama spelled out what raising the debt ceiling means for the country.
“Raising the debt ceiling does not authorize more spending. It simply allows the country to pay for spending that Congress has already committed to” he said.
To make that White House talking point even more clear, Treasury Secretary Timothy Geithner sent a letter yesterday to House Speaker John Boehner and the U.S. House of Representatives wherein he explained the notion that raising the debt ceiling is following through with the final budget step that Congress previously approved in earlier sessions.
“It is important to point out that extending borrowing authority does not increase government spending; it simply allows the Treasury to pay for expenditures Congress has previously approved. Failure to meet those obligations would cause irreparable harm to the American economy and to the livelihoods of all Americans” Geithner wrote.
In a follow-up statement to Obama’s comments, House Speaker John Boehner (R-Ohio) said “The consequences of failing to increase the debt ceiling are real, but so too are the consequences of allowing our spending problem to go unresolved.”