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News Link • Government Debt & Financing

Debt Ceiling Not To Be Resolved Until July?

From Reuters: Senate Republican Leader Mitch McConnell and Eric Cantor, the No. 2 Republican in the House of Representatives, fired the opening shots in what is expected to be a bitter fight with the White House over increasing the U.S. borrowing limit to enable the country to keep paying its debts. In a speech on Wednesday, President Barack Obama will lay out his vision for reducing U.S. deficits to a manageable level through tax increases, spending cuts and changes to expensive healthcare programs for the poor and elderly. Republicans plan to pass a rival plan in the House this week that would lower top tax rates, further slash domestic spending and eventually cut benefits in government-run health programs. "Tax increases are unacceptable and a nonstarter," House Speaker John Boehner said in a statement. "We don't have deficits because Americans are taxed too little, we have deficits because Washington spends too much." McConnell and Cantor said separately that Congress would hold a vote sometime between those two dates. "We anticipate that this debt ceiling issue will come before us between Memorial Day (May 30) and the Fourth of July," McConnell said. Cantor said: "Treasury if I'm not mistaken has put forth a notice which says there is a window within which we have to act in order to avoid the eventual default of this country on its debt. And I believe that that outside deadline is early July." Republicans see the debt limit vote as an opportunity to win further spending cuts, and say they will not support an increase without them. All 47 Republicans in the Senate have signed on to a measure that would amend the Constitution to require a balanced budget. Some analysts were skeptical of the Republican strategy.

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