During a Capitol Hill press conference, Pelosi was asked: “What is the Democratic contingency if the [federal] debt limit isn’t raised before the end of the year and Republicans demand --?”
Pelosi said, “Well, the president has put forth in his budget what I believe to be an excellent proposal. We have said in our budget that passed under the leadership of Chris Van Hollen (D-Md.) where we think all of this should go. It’s a negotiation.”
“Now, if we can take the middle-income tax cuts off the table, then we have end the hostage-taking that the Republicans have been engaged in: ‘We’re not going to do that unless you give tax cuts to the wealthy,’” Pelosi said. “I think that clears the debate to find areas of agreement as we go forward.”
“But I’m not going to put forth what that is here today because we go to the table to negotiate,” she added.
President Obama’s fiscal year 2013 budget, which would have added $6.4 trillion in new deficits over 10 years, received zero votes in Congress. The House defeated the budget 414-0 in March, while the Senate struck it down 99-0 in May. The budget included additional stimulus spending and raising taxes on upper-income earners.
It is estimated that if the tax rate for people making over $250,000 a year is raised, as the president demands, it will bring in about $90 billion in revenue, which is enough to pay for federal spending over about 9 days – the federal government spends about 9.5 billion per day.
The federal debt limit refers to the amount of money the federal government can legally borrow to pay its bills. The current debt limit, or debt ceiling, is $16.4 trillion, and Congress is expected to hit that limit around the end of this year. To raise the limit, to borrow more money to keep the federal government in full operation, Congress must pass legislation to raise that ceiling and the president must sign it into law.