Democrats Plan Maneuver to Allow Obama to Raise Debt Ceiling
Monday, October 7, 2013 01:46 PM
By: Newsmax Wires
Senate Democrats say they'll advance a bill giving President Barack Obama the authority to raise the debt ceiling unless two-thirds of Congress disapproves, according to a Senate Democratic aide.
The issue of increasing the borrowing limit and avoiding an unprecedented default is fast becoming a central focus in Washington — and comes as ordinary Americans say they're deeply dismayed with the week-old government shutdown, and are finding blame with both Republicans and Democrats.
"It looks like there is more than enough blame to go around and both parties are being hurt by the shutdown," CNN Polling Director Keating Holland said.
An initial test vote on the proposal, described by the aide on condition of anonymity, could occur as soon as Oct. 11, just six days before federal borrowing authority is set to expire.
Democrats have been pressing for a one-year increase in the nation's $16.7 trillion debt ceiling without any of the spending cuts or policy changes Republicans are demanding.
The idea to give Obama the authority to raise the debt ceiling barring a congressional disapproval was first proposed by Senate Minority Leader Mitch McConnell, a Kentucky Republican, in 2011; it became part of the Budget Control Act passed in August of that year.
The Senate Democratic aide said the strategy could make it easier to get Republican votes because no Republican would have to vote directly for a debt-ceiling increase.
Senate Majority Leader Harry Reid, a Nevada Democrat, said last week in an interview with Bloomberg News he would move a "clean" debt ceiling increase bill before Oct. 17, when the Treasury expects borrowing authority to lapse.
The way out may stave off a rising tide of voter disapproval with the Washington stalemate — in one new poll, most Americans think the shutdown is causing a crisis, and that both Republicans and Democrats are to blame.
The CNN/ORC International survey, conducted over the weekend and released Monday, showed 63 percent of those questioned say they're angry at the Republicans for the way they have handled the shutdown.
"But the Democrats are not getting off scot-free. Fifty-seven percent of Americans are also angry at the way the Democrats are dealing with the shutdown. And a 53 percent majority say they are also angry at President Obama," Holland, the CNN polling director, said.
The CNN poll results are similar to those from a new Pew Research Center poll, also released Monday, and surveys from Gallup and CBS News/New York Times surveys conducted last week that indicate slightly more people blaming — or angry at — Republicans than Democrats or the president for the shutdown.
The CNN poll indicates 18 percent of the public says the shutdown is a crisis and an additional 49 percent say the shutdown has caused major problems.
And there was an equally grim assessment from Americans in a new Washington Post-ABC News poll.
Voter disapproval of Republicans' budget wrangling after a weeklong shutdown has shot up to 70 percent, with 51 percent disapproving "strongly," according to this poll.
At the same time, Obama's approval rating got a slight bump due to improved marks among moderate Democrats and independents.
No group earns positive marks for their handling of budget negotiations overall.
The results showed: 45 percent approve of Obama's handling of budget negotiations, up slightly from 41 percent last week, but 51 percent disapprove of Obama, with 39 percent of voters disapproving strongly.
A whopping 61 percent of Americans now disapprove of congressional Democrats — up from 56 percent last week — with strong disapproval, rising 9 points to 45 percent.
A Post-ABC poll last week found 63 percent disapproving of Republicans; the number jumped to 70 percent in the past week. Strong disapproval has grown from 42 to 51 percent over the same period.
The Post-ABC poll was conducted Oct. 2 to 6, with a margin of error of 3.5 percentage points.
Meanwhile, the White House signaled Monday it would be open to a short-term hike in the nation's borrowing authority as the nation moved a step closer to its first-ever default, and the partial government shutdown entered its second week.
Gene Sperling, a senior Obama economic adviser, was pressed on whether he would rule out a two- or three-week extension on increasing the nation's $16.7 trillion debt limit. Treasury Secretary Jack Lew has warned that on Oct. 17, he exhausts the bookkeeping maneuvers he has been using to keep borrowing.
"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 told a breakfast 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."
Economists say a default could trigger a financial crisis and recession that would echo 2008 — or worse. The 2008 financial crisis plunged the country into the worst recession since the Great Depression of the 1930s.
Sperling reiterated President Barack Obama's vow not to negotiate on the debt because it would sanction the threat of default as a bargaining chip and increase the chance of default in the future.
A defiant House Speaker John Boehner has insisted Obama must negotiate on changes to the 3-year-old health care law and spending cuts if he wants to end the shutdown and avert a default.
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"We're not going to pass a clean debt limit increase," the Ohio Republican said in a television interview Sunday. "I told the president, there's no way we're going to pass one. The votes are not in the House to pass a clean debt limit, and the president is risking default by not having a conversation with us."
The uncompromising talk rattled financial markets early Monday as stocks slumped. China, which holds $1.277 trillion in U.S. Treasury bonds and stands as the United States' biggest foreign creditor, urged that all efforts be made to avoid a default.
Among congressional leaders, however, animosity marked the stalemate.
A statement from Reid accused Boehner of a credibility problem and called on him to allow a vote on a straightforward bill to re-open the government.
"There is now a consistent pattern of Speaker Boehner saying things that fly in the face of the facts or stand at odds with his past actions," said Adam Jentleson, a spokesman for Reid. "Americans across the country are suffering because Speaker Boehner refuses to come to grips with reality."
In response, Michael Steel, a spokesman for Boehner, said it was "time for Senate Democrats to stow their faux outrage and deal with the problems at hand. The federal government is shut down because Democrats refuse to negotiate, and the debt limit is right around the corner."
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Boehner said Sunday that he lacks the votes "to pass a clean CR," or continuing resolution, a reference to the temporary spending bill without conditions that would keep the government operating.
Lew has warned that the budget brinkmanship was "playing with fire" and implored Congress to pass legislation to reopen the government and increase the nation's debt limit.
The shutdown has pushed hundreds of thousands of workers off the job, closed national parks and museums and stopped an array of government services.
The one bright spot on Monday was that a significant chunk of the furloughed federal workforce is headed back to work. Defense Secretary Chuck Hagel ordered nearly 350,000 workers back on the job, basing his decision on a Pentagon interpretation of a law called the Pay Our Military Act.
Those who remain at home or are working without paychecks are a step closer to getting back pay once the partial government shutdown ends. The Senate could act this week on the measure that passed the House unanimously on Saturday.
Democrats insist that Republicans could easily open the government if Boehner simply allows a vote on the emergency spending bill. Democrats argue their 200 members in the House plus close to two dozen pragmatic Republicans would back a so-called clean bill, but the Speaker remains hamstrung by his tea party-strong GOP caucus.
"Let me issue him a friendly challenge. Put it on the floor Monday or Tuesday. I would bet there are the votes to pass it," said Sen. Chuck Schumer, D-N.Y.
In a series of Sunday television appearances, Lew said that while Treasury expects to have $30 billion in cash on hand on Oct. 17, that money will be quickly exhausted in paying incoming bills given that the government's payments can run up to $60 billion on a single day.
Treasury issued a report on Thursday detailing in stark terms what could happen if the government actually defaulted on its obligations to service the national debt.
"A default would be unprecedented and has the potential to be catastrophic," the Treasury report said. "Credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world."
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Private economists generally agree that a default on the U.S. debt would be extremely harmful, especially if the impasse was not resolved quickly.
"If they don't pay on the debt, that would cost us for generations to come," said Mark Zandi, chief economist at Moody's Analytics. He said a debt default would be a "cataclysmic" event that would roil financial markets in the United States and around the world.
Zandi said that holders of U.S. Treasury bonds would demand higher interest rates, which would cost the country hundreds of billions of dollars in higher interest payments in coming years on the national debt.