Both negotiations and the war of words continue over raising the federal debt limit and curbing future deficits. Further talks are planned this week, with the Treasury continuing to warn that congressional inaction by Aug. 2 risks “catastrophic” economic damage from a government default.
After weekend talks failed to break the impasse, President Obama used a Monday press conference to put pressure on Republicans to show more flexibility, saying he was prepared to “take significant heat” from his own party for the sake of a good compromise. He also ruled out proposals that would only take care of the debt limit for a few weeks or months.
Republicans on Monday continued to push for large cuts in some spending programs, notably those that were previously discussed in bipartisan talks led by Vice President Joe Biden.
Contrary to claims by some in Congress and on the campaign trail, the debt limit must be raised soon to avoid default. Stirring doubts about the government’s willingness to pay its bills on time could produce chaos in global markets and cost U.S. taxpayers hundreds of billions of dollars a year in higher interest costs.
“Refusing to pay your bills doesn’t make you fiscally responsible,” notes Concord Coalition Executive Director Robert L. Bixby. “It makes you a deadbeat.”
In a blog post last week, Bixby encouraged elected officials to work towards a comprehensive long-term budget plan that would be approved as the debt limit was increased. “Our fiscal challenges demand an ambitious approach. . . ,” he wrote. “Since negotiations on short-term objectives have gained little traction, a football analogy is apt: go long.”
Obama has pushed for a deal that would lower deficits in the coming years by a total of $4 trillion, roughly the size that some bipartisan panels have urged. Last weekend, however, Republicans indicated that they did not think such a large package was feasible.