With time running short to raise the federal debt limit, Republicans and Democrats are planning votes this week on competing plans that President Obama and House Speaker John Boehner championed in speeches to the country Monday night.
Obama called for “shared sacrifice” and objected to Republican efforts to ensure another debt limit battle before the 2012 election. Boehner said the President wanted a “blank check” and said Democrats were relying on “phony accounting.”
The Democratic plan, put together by Senate Majority Leader Harry Reid, promises to reduce projected deficits by $2.7 trillion without revenue changes and without affecting Medicare, Medicaid and Social Security. Boehner’s plan calls for $3 trillion in cuts, raising the debt ceiling in two phases, and no tax increases. Both plans include new bipartisan committees to identify savings.
The Treasury Department warns of a government default if the limit is not raised by Aug. 2. Credit rating agencies are considering downgrading U.S. debt, which would create enormous turmoil in the global economy. Some states and cities could also face credit downgrades.
On Saturday former lawmakers in both parties who serve on The Concord Coalition’s Board of Directors called on elected officials to quickly raise the debt ceiling while embracing a comprehensive fiscal reform plan by the Senate’s bipartisan “Gang of Six.”
The plan, released last week, “serves as a beacon for those who wish to support meaningful bipartisan solutions,” the Concord board members said. “ It confronts the inevitable trade-offs that must be made and defies those who insist that compromise is a fool’s errand. . . . With this proposal, the Gang of Six has become the Gang of Sense.”
Earlier last week, the House approved but the Senate rejected the Republicans’ “cut, cap and balance” proposal. It included spending cuts, a cap on future spending and congressional approval of a balanced budget amendment to the Constitution. Concord argues that the version of the amendment under discussion recently is deeply flawed.