WASHINGTON – Two top Republicans said Sunday that they oppose raising the nation’s debt ceiling without major cuts in the federal budget deficit, suggesting that the GOP may be heading toward a showdown as the deadline for congressional action nears.
Senate Republican leader Mitch McConnell, R-Ky. said on NBC’s “Meet the Press” he is ready to keep the ceiling in place “unless we do something really significant about debt and deficit.”
The U.S. has until Aug. 2 to raise the $14.3 trillion debt ceiling, according to Treasury Secretary Timothy Geithner. Failing to act would invite “catastrophic” consequences, Geithner has said. Military service members would not be paid, retirement investments would drop in value, and people would face higher payments on mortgages and car loans, he said.
President Barack Obama has said he expects Congress to increase the ceiling. In an interview last month, he said: “We will raise the debt limit. We always have. We will do it again.” The alternative, he said, is to “plunge the world economy back into a recession.”
In an interview on ABC’s “This Week,” former Minnesota Gov. Tim Pawlenty, a Republican candidate for president, asserted that the consequences of failing to raise the cap might not be as dire as the White House says.
Asked whether the result would be calamitous for the U.S. economy, Pawlenty said: “Well, there are some serious voices challenging that very premise. And the answer is nobody really knows, because we’ve not been at this point before.”
If opponents hold their ground, the U.S. could still manage by prioritizing payments, using the remaining cash to pay outside creditors first, Pawlenty said.