By Bridget Hunter
Citing the principles of open debate and fair compromise on which the nation was founded, President Obama briefed the American people on the need to increase the current U.S. debt limit and called for Congress to act quickly.
Weeks of negotiations between the White House and congressional leaders have failed to achieve an agreement. There is consensus that raising the legal debt ceiling should be tied to a broader strategy to better manage the nation’s finances, but debate continues on specific steps to do so. Republican Party leaders are urging deep spending cuts, while Democrats counter that additional revenue is needed to move the nation closer to a balanced budget.
The president, in a July 25 televised address, said bipartisan action is needed to break the impasse. “Because neither party is blameless for the decisions that led to this problem, both parties have a responsibility to solve it,” he said, adding, “Congress now has one week left to act, and there are still paths forward.”
Action is needed to prevent the United States from defaulting on its loans and to protect the excellent credit ratings it currently enjoys — ratings that allow the country to borrow at the best possible interest rates. Many financial experts predict a U.S. default would have adverse effects on the global economy, and congressional leaders say that is something they wish to avoid.
“So the debate right now isn’t about whether we need to make tough choices,” Obama said. “Democrats and Republicans agree on the amount of deficit reduction we need. The debate is about how it should be done.”
In the U.S. system of democracy, the executive branch — headed by the president — is responsible for conducting the financial affairs of the nation, but only Congress, the legislative branch, can levy taxes and authorize spending. The debt ceiling can only be increased by an act of Congress that then must be signed by the president, an example of the checks and balances deliberately established at the nation’s founding to ensure that power is not concentrated in one branch of government.
“America, after all, has always been a grand experiment in compromise,” Obama said in his address. “As a democracy made up of every race and religion, where every belief and point of view is welcomed, we have put to the test time and again the proposition at the heart of our founding: that out of many, we are one. We’ve engaged in fierce and passionate debates about the issues of the day, but from slavery to war, from civil liberties to questions of economic justice, we have tried to live by the words that Jefferson once wrote: ‘Every man cannot have his way in all things — without this mutual disposition, we are disjointed individuals, but not a society.’”
President Obama meets with Senate Majority Leader Harry Reid, right, and House Speaker John Boehner, left, at the White House July 23 to discuss the national debt.
Obama explained that “raising the debt ceiling does not allow Congress to spend more money. It simply gives our country the ability to pay the bills that Congress has already racked up.”
Defaulting on those obligations would be “a reckless and irresponsible outcome,” he said, and he urged Congress to work harder to hammer out a compromise. “The American people may have voted for divided government, but they didn’t vote for a dysfunctional government.”
In the United States, a divided government occurs when different political parties have control of portions of the federal government. The Democratic Party currently controls the White House and the Senate, but Republicans hold a majority in the House of Representatives.
Since 1960, Congress has acted 78 times to permanently raise, temporarily extend or revise the debt limit — 49 times under Republican presidents and 29 times under Democratic presidents, according to the Department of the Treasury.
The United States reached its debt limit on May 16, but the Treasury Department took a series of steps to extend temporarily its ability to meet the nation’s financial obligations. The last of those measures, suspending reinvestment of the Government Securities Investment Fund, was taken July 15. The nation’s borrowing authority will be expended August 2, according to the Treasury.
“This is no way to run the greatest country on Earth,” Obama said. “So let’s seize this moment to show … we can still keep our word and meet our obligations … we can still come together as one nation.”
(This is a product of the Bureau of International Information Programs, U.S. Department of State. )