The U.S. officially bumped up against the $14.3 trillion debt ceiling Monday, but rather than heading to the negotiating table, Members of both parties ran to the television cameras.
Treasury Secretary Timothy Geithner sent a letter to Congress on Monday outlining accounting maneuvers he is using to avoid breaching the debt ceiling until Aug. 2, when he projects the country will default on its obligations. He again asked Congress to approve a debt limit increase “as soon as possible” to avoid a global financial catastrophe.
However, with two months until the cutoff date, partisans on both sides are still trying to frame the debate before the deal-making begins in earnest — with Republicans attempting to assure the public there is no reason to fear a default and Democrats taking the opposite approach.
Minority Whip Jon Kyl (Ariz.), the Senate Republican negotiator in debt talks with Vice President Joseph Biden, said he was hopeful Republicans and Democrats could come together, and he dismissed worries about a default.
“I would not be concerned that the United States of America would ever default on its debt,” he said on the floor. “We won’t.”
But Kyl set a high bar for reaching a bipartisan deal. Echoing demands Republican leaders have insisted on for weeks, he called for reaching an agreement on spending caps for at least the next few years and cuts in the growth of entitlements, but no tax increases.
“We need to as a down payment be looking at about $2 trillion [in spending cuts] here,” Kyl said. “So far as part of our negotiation we’re only talking about a couple of hundred billion dollars.”
Republicans have largely embraced Speaker John Boehner’s (R-Ohio) call for spending cuts equal to the nearly $2 trillion debt limit increase that President Barack Obama is asking for.
On the other hand, Senate Majority Leader Harry Reid (D-Nev.) warned Republicans who have tied their potential support for any debt limit increase to deep spending cuts that a failure to raise the debt ceiling would be disastrous.
“We would be out of our minds” not to raise it, he said on the Senate floor. Lawmakers who have said they would vote against the debt limit hike are “willing to risk the strength of our economy just to make a political point.”
Reid said wasteful spending should be cut, but he pointed to tax breaks for oil companies as an example.
“The people who want to keep giving their Big Oil buddies $4 billion ... a year are the same ones who want to take the social safety net away from the sick, seniors and the poor,” Reid said.