The next brutal battle over raising the debt ceiling is already underway, and GOP lawmakers are digging in their heels against President Obama. Any increase in the government’s borrowing authority depends on President Obama and Democrats agreeing to spending cuts, including reductions in entitlement programs.
Senate Minority Leader Mitch McConnell, who played a key role in steering the country away from a fiscal crisis last week, told NBC’s “Meet the Press” Sunday that unless Democrats cave on spending, a government default might be the only choice.
“It's a shame that we have to use whatever leverage we have in Congress to get the president to deal with the biggest problem confronting our future—and that's our excessive spending,” McConnell said. “If we're not going to deal with it now, when are we going to deal with it? And we've watched the government explode over the last four years. We've dealt with the revenue issue.”
In line with McConnell’s remarks, House Speaker John Boehner insists that the GOP must hold firm on spending, and told his members to demand that every dollar they raise the debt limit must be paired with spending cuts. - Read more at The Fiscal Times
OBAMA: WHITE HOUSE WON’T NEGOTIATE Democrats are also playing tough on the debt ceiling. They’re repeating the vow President Obama made immediately after Congress passed the fiscal cliff bill last week—no tolerance for Republicans using the debt ceiling as a bargaining chip like they did in 2011. So, obviously someone has to surrender at some point—even if Obama says he refuses to fight.
- Read more at CBS News
WILL OBAMA PUT MEDICARE ON THE TABLE? Probably. Healthcare experts and former Obama advisers believe the White House will give GOP lawmakers a counteroffer that reduces Medicare expenditures and controls health care costs.
"My expectation is that the president will offer a mix of ideas on the Medicare program that will not be about middle-income beneficiary cuts," said Neera Tanden, a former Obama healthcare adviser who heads the Center for American Progress. "My hope is that he'll look at a variety of ideas to use this negotiation, just like we used (health care reform), to push forward on health care cost reductions.”
Obama offered a smorgasbord of Medicare reductions during the failed grand bargain talks. But they largely hinged on the government paying less for prescription drugs, rather than structural changes that Republicans want to address the steep increase in costs a decade from now. - Read more at The Fiscal Times
DEMS WANT $1 TRILLION IN NEW REVENUE Democrats on Capitol Hill are preparing to fight for $1 trillion in new revenue. With the $620 billion over the next decade from the cliff deal, that’s how Obama gets back to the $1.6 trillion in revenue that he originally sought in his 2013 budget proposal.
According to The Hill, the emerging consensus among Democrats is that the next deficit reduction package should contain $2 trillion, about half of which should come from higher taxes. But if Democrats pursue this plan in the weeks ahead, they can count on facing staunch opposition from Republicans, who reluctantly agreed to raising revenues as part of a fiscal cliff deal last week. “The tax issue is finished,” Senate Minority Leader Mitch McConnell on Sunday told ABC’s “This Week.” - Read more at The Hill
CONTRACTORS OPTIMISTIC OVER SEQUESTER DELAY Here’s one big interpretation of the fiscal cliff bill that staved off the massive sequester cuts for two months: Federal contractors say that lawmakers won’t allow the across-the-board spending cuts to happen at all.
“The implication is clear [that] the system will probably compromise on sequestration,” Loren Thompson, a defense industry consultant, told The Washington Post. “Defense executives are beginning to suspect sequestration as they had feared it will not unfold and, although there will be some cuts, they’ll be more modest.” - Read more at The Washington Post
EVERYTHING YOU NEED TO KNOW ABOUT THE DEBT CEILING The Fiscal Times has assembled a quick debt ceiling primer to get you up to speed on everything you need to know as the debate over raising the nation’s borrowing limit heats up. - See a guide to the debt ceiling here