Despite days of negotiations, House Republicans are still standing firm against increasing the federal debt ceiling, threatening the country with default unless their demands for huge spending cuts (and no tax increases) are met. Not only would failing to raise the debt ceiling do serious harm to the national economy, it would adversely impact state and local economies.
In fact, earlier this week, the credit rating agency Moody’s warned that five states — Virginia, Maryland, New Mexico, South Carolina, and Tennessee — could have their credit downgraded if the federal government’s credit rating goes down, “because their dependence on federal revenue makes them vulnerable to a U.S. credit cut.” In response, Virginia Gov. Bob McDonnell (R) urged Congress to come to a debt ceiling compromise “immediately“:
“There’s got to be a compromise, I’m not going to tell them how to do it. I’d suggest they try spending cuts — everybody knows they’re spending too much,” McDonnell said on MSNBC. “But they’ve got to get this done immediately or the uncertainty for the business community is going to be just devastating to our country.” [...]
“It’s not going to get done without some compromise and when it’s affecting states now, it’s creating great uncertainty, there’s massive unhappiness with the federal government generally over its inability to do the basic things that government needs to do.“
But McDonnell was not always so keen on Congress reaching a compromise. In fact, just a few months ago, he told the ultra-conservative Human Events that the debt ceiling shouldn’t be raised at all, unless Republicans received all their demands:
“The only way that it is appropriate to increase the debt limit,” McDonnell told HUMAN EVENTS, “is if there is a tangible, written, irreversible set of structural reforms in spending in the United States government that makes sure we are on a downward trajectory in spending that will get us to a balanced budget much farther.”
“If we don’t achieve those goals, then I don’t see any gain in increasing the debt limit.”
It’s no surprise that McDonnell sees a benefit to raising the debt ceiling now. Perhaps he could convince the Republicans in Congress of the urgency of the situation?