By Sean Hackbarth
Free Enterprise, a publication of
the U.S. Chamber of Commerce
WASHINGTON (Jan. 23, 2013) — Getting to “real, meaningful spending cuts” and avoiding default requires Congress to pass a short-term increase in the debt ceiling, according to a letter to Members of the House of Representatives sent by Bruce Josten, the U.S. Chamber’s Executive Vice President for Government Affairs.
The House is expected to vote today on H.R. 325, an increase that will last through May 19.
Since December, the Treasury Department has been using what it calls “extraordinary measures” to allow the federal government to keep paying its bills. Those measures will reach their limit in mid-February or early March. By not raising the debt ceiling, the U.S. would be faced with default.
Josten noted that simply passing a long-term increase in the debt ceiling without “meaningful reductions in government spending might avert a default, but it would result in a downgrade of the nation’s credit-rating.” He emphasized that entitlement reform is key to maintaining a “AAA” credit rating on U.S. debt. “Absent needed structural reforms, financial markets will react negatively, the country risks another downgrade, and the business community and American citizens face continued economic uncertainty.”
Passing a short-term increase in the debt ceiling “would avert default and provide time for Congress and the Administration to address fundamental spending cuts and much needed structural reforms,” he wrote.
Originally published January 2013. Reprinted by permission, freeenterprise.com, January 2013. Copyright© 2013, U.S. Chamber of Commerce.