Several Republican senators have recently said that they intend to take the federal debt limit — and thus the creditworthiness of the nation — hostage in order to force Democrats and President Obama to accept cuts to critical federal programs, including Social Security and Medicare. “Before we vote again to address the debt ceiling — even though it may be at great political cost — we’ve got to address spending, and that means entitlements,” said Sen. John McCain (R-AZ).
Failure to raise the debt ceiling — which merely confirms that the nation will pay for spending already approved by Congress — would have catastrophic consequences for the economy. But Senate Minority Leader Mitch McConnell (R-KY) is clearly on board with taking it hostage, pushing Republicans to “seize” this “immediate opportunity”:
But in the upcoming months, we will have the opportunity to put our country back on sound financial footing—and there’s no excuse not to seize it. The President claims to want a balanced approach to solve our problems. And now that he has the tax rates he wants, his calls for ‘balance’ mean he must join us in our efforts to achieve meaningful spending and government reform. We have an immediate opportunity to act: the debt ceiling.
But a “balanced” deal would require much more revenue that that included in the deal to avert the so-called “fiscal cliff.” While that deal raises about $620 billion, spending cuts enacted last year total about $1.5 trillion, a 2.5 to 1 ratio of programmatic spending cuts to revenue. Adding in savings from interest payments on the debt moves the ratio to 3 to 1.
Despite these numbers, McConnell is urging Republicans to take the creditworthiness of the entire country hostage to gut programs upon which millions of Americans depend. Failing to raise the debt ceiling would cause a bigger economic contraction than that experienced during the depths of the Great Recession.