Senate Budget Committee Chairman Kent Conrad (D-N.D.) said Monday that Congress may need to approve a short-term increase in the nation’s debt ceiling to allow time to work out a comprehensive deficit-reduction plan without defaulting on its debt obligations.
Currently, the Treasury Department projects that the country will reach its legal borrowing limit on Aug. 2. Republicans and Democrats have been jousting over the conditions under which members of Congress would be willing to take the politically unpopular vote to raise the debt limit.
“I can see a circumstance in which there would be some short-term [increase] so that the overall plan can be given the consideration that it deserves,” Conrad told reporters at the Capitol on Monday evening.
He said that he didn’t have a specific length of time in mind for the stopgap increase, adding: “I could see something to carry it toward the end of the year so that the overall plan has a chance to be put in place by the committees of jurisdiction.”
His remarks came shortly before House Speaker John Boehner (R-Ohio) was to stake out the House Republican position in the debt-limit fight in an address in New York City. Boehner was expected to call for the cutting of trillions of dollars in federal spending in exchange for allowing further government borrowing.
There is precedent for a short-term fix to the debt ceiling: In December 2009, congressional leaders raised the borrowing limit by $290 billion, thereby putting off action on a $1.8 trillion increase that Democrats had originally sought.
Many members of Congress have blanched at the idea of increasing the debt ceiling at a time of record deficits, but the Obama administration has argued that allowing the country to go into default for the first time ever could have “catastrophic” consequences on the world’s economy.
The two parties remain far apart on conditions under which they’d vote for raising the debt limit. Conrad dismissed Boehner’s idea of attempting to tackle the national debt without raising revenues.
“It’s got to be a package; how does the whole thing add up? ... I will just speak for myself: I will not support any long-term extension of the debt without a credible plan to deal with the debt,” Conrad said. “And by credible plan, I don’t mean just on the spending side of the equation, because revenue is the lowest it’s been in 60 years as a share of GDP, spending is the highest it’s been in 60 years as a share of GDP. So, clearly you’ve got to work both sides of the equation.”
Republicans have stated that any deficit-reduction plan that includes tax increases would be a non-starter for them, arguing that the country has a spending problem, not a revenue problem.
Conrad also said that he’s still aiming for $4 trillion in spending cuts over 10 years in the Senate Democratic budget proposal that he is planning to unveil, although the plan will likely not be ready before next week.