Senator Jim Risch (R-ID) “on Thursday called the way the U.S. borrows money a ‘Ponzi scheme’ that could soon throw the country into financial turmoil,” according to the Floor Action blog.
"It took time for this to set in," said Risch, according to northern Idaho’s Coeur d’Alene Press. "What I realized was this country is no longer the master of its own destiny."
Risch described in detail how the Bureau of Public Debt, through the U.S. Department of Treasury, goes about borrowing the $4 billion to $5 billion a day needed to keep the federal government running.
"There’s no money," said Risch. "It’s a Ponzi scheme."
The suddenly “white-hot issue of deficit caps — now a central front in the battle over raising the debt ceiling — will be the subject of a hearing Wednesday in the Senate Finance Committee,” Roll Call reports.
Panel Chairman Max Baucus (D-Mont.) announced the hearing on the issue Thursday morning. It will include testimony from former Sen. Phil Gramm (R-Texas), who was part of the bipartisan Gramm-Rudman-Hollings deficit reduction plan in the 1980s.
Baucus has said he backs the idea of a deficit cap as part of a plan to increase the federal debt ceiling. Republicans generally want spending caps instead, although they also are pushing for a balanced budget amendment to the Constitution.
Majority Leader Harry Reid (D-NV) said today “he is not ‘drawing any lines in the sand’ about what must be included in a deal to raise the debt ceiling except to say it must ‘prove that we’re willing to do something’ about the ever-growing debt,” CNN reports.
Most Republicans and many Democrats on Capitol Hill have vowed not to raise the borrowing limit unless it is tied to strict reforms to rein in spending and shrink the deficit.
Reid said he supports a "deficit cap" similar to one the White House recently proposed. It would trigger spending cuts "if by 2014, budget projections do not show that the debt-to-GDP ratio has stabilized and is declining in the second half of the decade," according to a White House summary.
Those spending cuts would not apply to entitlement programs like Medicare and Medicaid, something many Republicans might oppose.
Appearing on CBS’ “Face the Nation” today, Senator Mark Kirk (R-IL) said he would like to see the bipartisan “gang of six” deficit reduction proposal attached to any increase in the debt limit, according to POLITICO.
"I think the best play here is to have the bipartisan deficit commission report of the Gang of Six attached to the debt limit extension," Kirk said. "That would be huge cuts in the future spending of the United States that may be a good deal. Without that we should not send a blank check to the administration."
The “gang” includes Senators Mark Warner (D-VA), Kent Conrad (D-ND), Dick Durbin (D-IL), Saxby Chambliss (R-GA), Mike Crapo (R-ID) and Tom Coburn (R-OK).
Senator Mark Pryor (D-AR) “told members of a local political group Wednesday that he’ll need to see a commitment to cut spending and overhaul the tax code in order to vote to raise the $14.3 trillion cap,” Fox News reports.
The government is expected to reach that ceiling by mid-May.
“What I’ve told anyone who will listen to me in Washington, including my leadership, is that I’m not going to vote for that unless there is a real and meaningful commitment to debt reduction,” Pryor told the Political Animals Club at its monthly meeting at the governor’s mansion.
“Everybody’s going to have a cut, no matter how worthy your program is or how much wise you’ll be with the money or the great things you’ll do. Get ready, because everything’s going to get cut,” Pryor said.
Majority Leader Harry Reid (D-NV) told ABC News last week “that he feels ‘embarrassed’ that four years ago he argued against raising the country’s debt limit.”
“Why is it right to increase our nation’s dependence on foreign creditors?” Reid said on March 16, 2006. “Democrats won’t be making an argument to support this legalization, which will weaken our country.”
“I shouldn’t have done that. I’m kinda embarrassed I did. It was a political maneuver by we Democrats. The Republicans were in power – there were more of them,” Reid said. “The president voted when he was in the Senate the same way. I heard him apologize for it. We all should take a look at how we handle these issues, but that doesn’t take into consideration the numerous times, the numerous times I voted to raise the debt ceiling. The one time I tried to make a political issue of it, I wish I hadn’t."
Reid says that now Congress “has no choice but to raise the $14.3 trillion limit to keep the country from defaulting on its debt in the coming months.”
Treasury Secretary Timothy Geithner “says Republican leaders have privately assured the Obama administration that Congress will raise the government’s borrowing limit in time to prevent an unprecedented default on the nation’s debt,” the AP reports.
But a top Republican quickly pushed back Sunday and said there was no guarantee the GOP would agree to increase the $14.3 trillion debt ceiling without further controls on federal spending.
Geithner told ABC’s “This Week” and NBC’s “Meet the Press” that Republicans told President Barack Obama in a White House meeting last Wednesday that they will go along with a higher limit.
“I want to make it perfectly clear that Congress will raise the debt ceiling,” Geithner said in the interviews taped Saturday and aired Sunday.