August 22, 2014

Talks Start on Raising Debt Limit

  • The national debt has grown significantly in recent years due to rising annual deficits. A deficit occurs in any year the government spends more...

With an eye on the need to raise the federal debt limit soon, administration officials and six congressional representatives began deficit-reduction negotiations last week. Some of those involved in the talks, chaired by Vice President Joe Biden, have offered hopeful and conciliatory comments.

Biden described the session on Thursday as a “good, productive first meeting.” The talks were scheduled to resume today, and the President is also scheduled to meet with Senate Democrats and Republicans at separate White House meetings later this week. Because of the meetings, the Senate Budget Committee is unlikely to consider the FY 2012 budget resolution this week.

House Majority Leader Eric Cantor (R-Va.), one of the negotiators, said he thought there were “areas in which we can find some commonality.” Republicans have also been focusing less on their proposal to revamp Medicare, noting intense Democratic opposition to the idea.

The Treasury Department has warned that the government will risk default if the debt limit is not raised by early August. The Concord Coalition has urged Congress to use the debt limit increase as an opportunity to agree on procedural or substantive fiscal reforms.

In a speech in New York last night, House Speaker John Boehner (R-Ohio) said "It's true that allowing America to default would be irresponsible. But it would be more irresponsible to raise the debt ceiling without simultaneously taking dramatic steps to reduce spending and reform the budget process." Boehner called for spending cuts "greater than the accompanying increases in debt authority the president is given" and reaffirmed his position that "tax hikes should be off the table."

As elected officials this year continue to work on broad deficit reduction measures, they should keep everything – including Medicare reform and revenue increases – on the table for discussion. Statements ruling certain options off limits are not responsible.