Jan. 14, 2013 (TSR) – To force the Obama administration to cut spending, some House Republicans have advocated allowing the US to fall into default or shut down the government. By running out of money, the US would be unable to pay its bills as early as mid-February.
Some Republicans on Monday expressed their intentions to send the country into default if significant spending isn’t cut soon. The government could run out of cash as early as February 15 – but partisanship is preventing the parties from agreeing on a deficit-reduction plan to keep the US economy going.
“I think it is possible that we would shut down the government to make sure President Obama understands that we’re serious,” House Republican Conference Chairwoman Cathy McMorris Rodgers told Politico. “We always talk about whether or not we’re going to kick the can down the road. I think the mood is that we’ve come to the end of the road.”
Gathering for private meetings, GOP leaders agreed that they consider it riskier to add to the US debt than undergo a default. Republican leadership officials said that more than half of their members are ready to let the country run out of money and shut down the government to have their voices heard.
“The President could absolutely never have to deal with the debt limit again. It will just require him to get serious about spending cuts,” Brendan Buck, spokesman for House Speaker John Boehner, R-Ohio, wrote in a tweet.
President Obama addressed the issue during a news conference Monday, outlining the bills that would be left unpaid if the country were to fall into default.
“If congressional Republicans refuse to pay America’s bills on time, Social Security checks and veterans benefits will be delayed,” Obama said. “We might not be able to pay our troops, or honor our contracts with small business owners. Food inspectors, air traffic controllers, specialists who track down loose nuclear materials wouldn’t get their paychecks.”
Between Feb. 15 and March 15, the government will receive $277 billion in revenue and face $452 billion in bills that it would not be able to pay unless it increases the debt ceiling and/or cuts spending. Those who rely on government programs, such as Social Security recipients, veterans, and the poor, would be cut off from receiving aid and government employees would not be able to work. Interest rates would rise, the nation’s credit rating could be downgraded, and other countries would be less likely to trust the US financially.
Obama called the GOP stance on raising the debt ceiling “irresponsible” and “absurd” and pledged not to let Republican threats destroy the US economy and create “a self-inflicted wound”.
“They will not collect ransom in exchange for not crashing the American economy,” he said during his last news conference of his first term in office. “The full faith and credit of the United States of America is not a bargaining chip. And they better decide quickly because time is running short.”