With the arrival late Friday of a compromise deal to fund the government through the rest of the 2011 fiscal year, eyes are turning to the looming fight over an increase in the debt ceiling. And today, House Majority Whip Eric Cantor (R-VA) reiterated to Fox News Sunday host Chris Wallace his intention to hold the nation’s fiscal health hostage in order to advance the right’s ideological agenda:
CANTOR: We’re talking about putting in maximum caps as far as expenditures are concerned. We’re talking about changing the way that the entitlements work in this country for the future, while protecting today’s seniors. These are the kind of things that we’re talking about.
WALLACE: Let me make sure I understand. Obviously, that would be part of the 2012 budget. Are you saying you will impose them as part of the deal to raise the debt limit?
CANTOR: Just as we saw happened this week in Washington, there comes a time leverage moment here, a time in which the White House and the president will actually capitulate to what the American people want right now. They don’t want to raise taxes. They don’t want spending to continue to spiral out of control. Those are the kind of things and mechanisms — whether it’s spending caps, entitlement reforms, budget process reforms — these are the kinds of things that we’re going to have to have to go along with the debt limit increase.
Rep. Jeb Hensarling (R-TX) also piled on the bandwagon, pointedly refusing to give CNN’s Candy Crowley a simple “yes” or “no” answer on whether he would “play chicken with the debt ceiling”:
CROWLEY: So you will vote for the debt ceiling?
HENSARLING: The president’s going to have to cut up the credit cards. He’s gonna have to work with us to cut up the credit cards and put the nation on a fiscally sustainable path. Otherwise, we’re going to continue to continue to lose jobs and we’re going to bankrupt our children. It’s that simple. At some point you just gotta quit spending money you don’t have.
CROWLEY: But you’re not willing to play chicken with debt ceiling? Just yes or no if I could.
HENSARLING: Well, I don’t know what you mean by playing chicken. I’ve said the same thing three times. I do not want America to default on its debt. But the president is going to have to start the process of cutting up the credit cards, pure and simple.
It is widely understood — including among Republicans — that failing to raise the debt ceiling on schedule could have immediate and dire consequences for government services and the global economy. As the Center for American Progress’ David Min has pointed out, it would force an immediate cut of approximately 40 percent to all activities of the federal government; a severe blow to our already struggling economy. It could also erode confidence in U.S. Treasury bonds, causing interest rates to spike and the possible destabilization of global financial markets. Sen. Lindsey Graham (R-SC) has acknowledged as much, as has House Speaker John Boehner (R-OH), Rep. Paul Ryan (R-WI), and conservative columnist George Will.
This has not prevented many GOP lawmakers, including the very politicians just listed, from threatening to vote down an increase in the debt limit if their partisan demands are not met. Senate Majority Leader Mitch McConnell (R-KY) has said there can be no increase without entitlement cuts, Sen. Ran Paul (R-KY) demanded an implicit 44 percent cut in all government programs in exchange for an increase, Graham named slashing Social Security as his price by Graham, and Rep. Steve King (R-IA) has called for using it to undo health care reform.