Pressure Point
“This is a pressure point, we should use it,” Republican Representative Scott Rigell said on Bloomberg Television today. “I want Democrats to help us on this, we’re all in this together, we can’t continue to spend at this rate.”
Obama on Jan. 1 said he would not bargain over the debt ceiling and warned that the consequences of not raising the government’s borrowing authority “would be catastrophic.”
Geithner told Congress on Dec. 31 that the U.S. hit its statutory debt limit, necessitating emergency steps announced last week to keep funding government operations and avoid default. By relying on “extraordinary measures” Geithner has said treasury can create about $200 billion of “headroom” to avoid possible default.
The next treasury secretary will have a major role in negotiating the debt limit deal with Congress, said Ann Mathias, director of Washington research for Guggenheim Securities LLC.
Secretary’s Role
“Washington is turning from taxes to spending, which will dominate the view for the next quarter,” Mathias said in an e- mail. For the Treasury secretary, getting a deal done “will take an enormous amount of his, or her, time and involve the same back and forth between tables that we saw during the tax deal.”
Obama has said that he will not negotiate with Congress over raising the debt ceiling, though Republicans, as well as some of the president’s allies, say that he will have little choice.
February will bring negotiations over cutting spending and funding the government along with the debt ceiling issue, said Peter Orszag, Obama’s first Office of Management and Budget director.
“Whether the debt limit is technically included in the negotiations or not therefore doesn’t really matter,” he said in an e-mail. “A deal will have to be struck over other spending items anyway, and part of the ultimate deal will have to be an increase in the debt limit.”