Washington (CNSNews.com) - House Democratic Whip Steny Hoyer (D-Md.) said Congress needs to raise the federal debt limit above its current $14.29 trillion limit regardless of whether spending cuts are made in the federal budget.
At a pen and pad meeting with reporters on Tuesday, Hoyer said, “I hope we can reach an agreement [with Republicans] on the fiscal restraints and bringing the [budget] deficit and the [national] debt down -- the debt being long-term, deficits being short-term," said Hoyer. “If we can’t, I think we need to increase the debt [limit] in any event because America is going [to] pay its bills and I think Americans share that value of fiscal responsibility.”
Hoyer said he agrees with House Speaker John Boehner [that] before this month ends, "we need to do something on extending the debt [limit]. If we can do it with deficit and debt reductions at the same time, fine. If we can’t, we still have no alternative but to increase the debt limit.”
The debt limit is the amount of money the federal government can legally borrow. The amount is voted on by Congress and signed into law by the president. The current legal limit on the federal debt, $14.294 trillion, was signed into law by President Obama in February 2010. The federal government bumped up against that debt limit on May 16.
On May 9, House Speaker John Boehner (R-Ohio) said it would be “irresponsible to raise the debt limit without simultaneously taking dramatic steps to reduce spending and to reform the budget process,” adding, “We're not talking about billions here. We should be talking about cuts in trillions.” Boehner has also maintained that “tax hikes should be off the table.”
Repeating that position, Boehner said on May 26, “Without significant spending cuts and reforms to reduce our debt, there will be no debt limit increase. And the cuts should be greater than the accompanying increase in debt authority the president is given.”
On June 1, he said, “This morning, I released a letter signed by 150 economists who agreed that if we’re going to get serious about creating jobs in America, we have got to reduce some of the uncertainty. Some of that uncertainty is caused by the giant debt that’s facing our country. The fact is, if we’re going to raise the debt limit, the spending cuts should exceed the increase in the debt limit.”
Hoyer said on Tuesday, “I’ve indicated to the Republican leadership and [it] was clearly demonstrated on the floor that Democrats are prepared in very significant numbers to join with our Republican colleagues. We are not prepared to be put in a political corner. But we are prepared to act responsibly. And I think that the Democrats will provide -- certainly, well over half of our caucus -- assuming that the Republicans are prepared to share their share of the burden and responsibility to make sure that America pays its bills.”
“My view is that if we pass the debt limit extension as [a] free standing bill, that will not relieve the pressure to deal with the debt and deficit. I believe that’s a crisis in and of itself whether or not we’ve had any issue with respect to the debt limit. We cannot sustain the deficits that we are incurring on an annual basis. They must be dealt with, but one of the ways you have to do it, of course, is to grow the economy.”
Hoyer also said lawmakers should act to raise the debt limit within the next 10 days to avoid further market uncertainty, adding that the White House wants to raise the debt limit at least $2 trillion (above the $14.29 trillion limit).
Treasury Secretary Tim Geithner has said lawmakers must raise the debt limit by Aug. 2 or the government will default and may fall into another recession or even an economic depression.
On May 31, the House Republicans proposed legislation to raise the debt limit by $2.4 trillion without any federal spending cuts. This proposal was voted down (318 to 97). If Speaker Boehner and House Republicans maintain that spending cuts should exceed the increase in the debt limit, then some package of cuts could conceivably total $2 trillion or more.