The looming showdown over the federal debt limit had Democratic leaders and the White House warning Thursday of catastrophe without an increase, while Republican leaders pushed for a substantial package of budget cuts.
Senate Majority Leader Harry Reid ripped Republicans for threatening to block the debt limit hike.
“They’re even threatening to shut down government, to have the United States of America default on its bills,” the Nevada Democrat said. “You can imagine, as well as I can, the economic crisis this would cause. And not only what it would do internationally, but what it would do at home: no more Social Security checks; the troops wouldn’t get their checks; veterans wouldn’t get their checks; border security, FBI, all of it.”
Some Republicans have declared they wouldn’t support a debt limit increase under any circumstances, while GOP leaders want to accompany an increase with an unspecified package of spending cuts.
Treasury Secretary Timothy Geithner notified Congress on Thursday that the debt limit is expected to be reached as early as March 31 and that the ceiling must be raised to avoid default on the nation’s financial obligations.
Speaker John Boehner (R-Ohio) responded that a debt limit hike must be accompanied by spending cuts, while Senate Minority Leader Mitch McConnell (R-Ky.) pushed for bipartisan cooperation to cut the budget and to address the expiration of a continuing resolution, which is keeping the government funded through March 4.
“It’s an opportunity actually for us to come together,” McConnell said.
Reid also dismissed Republican efforts to repeal the health care law.
“The Republicans have to understand the health care reform bill is not going to be repealed,” he said, while conceding that the law is not perfect. Democrats are prepared to work with Republicans on changes, Reid said, but they will not abandon the benefits in the bill. He also said they will not support adding $230 billion to the deficit — the amount that a repeal would cost the government over the next decade, according to a Congressional Budget Office estimate released Thursday.
Both McConnell and Reid also said they saw the potential for overhauling tax laws this Congress.