News the federal deficit will hit a record in 2011 pushed Congress one step closer Wednesday to its first major battle of the year: raising the debt ceiling. The national debt stands at just over $14 trillion and will soon hit the statutory limit of $14.3 trillion. If Congress doesn't raise it soon, the Treasury won't be able to issue debt above that ceiling, which would lead to substantial spending cuts and the eventual possibility of default. Many Republicans are insisting on major spending cuts in return for raising the ceiling. Democrats scoff at the idea. Meanwhile, Tea Party activists are gearing up to fight over the issue. Red Ink Is Expensive
The budget deficit will hit a record $1.48 trillion in fiscal 2011, the Congressional Budget Office predicted Wednesday. Over the next decade, an additional $6.7 trillion in red ink is expected. Meanwhile, the unfunded liability for Social Security and Medicare is $19.1 trillion in present-value terms. With the long-term fiscal picture looking dire and anti-deficit fervor among voters stronger than ever, many GOP lawmakers are demanding major cuts in exchange for voting to raise the debt limit. "We can't afford to kick this can down the road any longer," said Rep. Jeff Flake, R-Ariz. "We need both spending cuts and spending caps in any deal to raise the debt ceiling." The GOP-led House will likely do just that. But Democrats still control the Senate and White House. It's unclear how a standoff would play out politically.
Meanwhile, Tea Party activists oppose any debt-limit increases. "We think voting for the debt ceiling is a dangerous thing to do," said Mark Meckler, co-coordinator of the Tea Party Patriots. "It's time to cut up the credit card." A few Tea-infused members, such as Rep. Michele Bachmann, R-Minn., are steadfastly refusing to vote for a debt-limit hike. But more Republicans, like Flake, see a chance for driving a hard bargain. Rep. Frank Wolf, R-Va., recently said in a speech on the House floor: "When Congress is asked to increase the statutory debt limit, which will likely happen in the next few months, I will vote no, unless — and let me be completely clear here — there is a firm commitment to deal with the larger issue or the vote itself is tied to a plan to put America on a path to financial responsibility."
The budget deficit will hit a record $1.48 trillion in fiscal 2011, the Congressional Budget Office predicted Wednesday. Over the next decade, an additional $6.7 trillion in red ink is expected. Meanwhile, the unfunded liability for Social Security and Medicare is $19.1 trillion in present-value terms. With the long-term fiscal picture looking dire and anti-deficit fervor among voters stronger than ever, many GOP lawmakers are demanding major cuts in exchange for voting to raise the debt limit. "We can't afford to kick this can down the road any longer," said Rep. Jeff Flake, R-Ariz. "We need both spending cuts and spending caps in any deal to raise the debt ceiling." The GOP-led House will likely do just that. But Democrats still control the Senate and White House. It's unclear how a standoff would play out politically.
Meanwhile, Tea Party activists oppose any debt-limit increases. "We think voting for the debt ceiling is a dangerous thing to do," said Mark Meckler, co-coordinator of the Tea Party Patriots. "It's time to cut up the credit card." A few Tea-infused members, such as Rep. Michele Bachmann, R-Minn., are steadfastly refusing to vote for a debt-limit hike. But more Republicans, like Flake, see a chance for driving a hard bargain. Rep. Frank Wolf, R-Va., recently said in a speech on the House floor: "When Congress is asked to increase the statutory debt limit, which will likely happen in the next few months, I will vote no, unless — and let me be completely clear here — there is a firm commitment to deal with the larger issue or the vote itself is tied to a plan to put America on a path to financial responsibility."
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