While John Hood has educated us in recent weeks about the sizeable debt obligations most states face, the federal debt continues to generate more headlines.
Among the most recent points of discussion: Can budget hawks tie the upcoming increasing of the federal government?s $14.3 trillion debt limit to ?deep? spending cuts? The latest TIME probes this issue:
Democrats are encouraged by the memory of the 1995 budget fight between House Republicans (then led by Gingrich) and Bill Clinton, which led to a government shutdown. Clinton, who came off looking more responsible than Gingrich, used the showdown to turn around his presidency. Encouraged by this history, Obama may look to frame the debate to his advantage in the Jan. 25 State of the Union address. “It will be brinksmanship,” says a senior House Democratic aide. “I’m trying to think this through myself.”
But Republicans argue that they hold far more cards today, thanks to a debt far larger ? and far more alarming to the public ? than it was 16 years ago. They will seek to attach perhaps as much as tens of billions of dollars in spending cuts ? an amount they’d be unlikely to slip through the regular budget process ? to any bill boosting Uncle Sam’s IOU account. “If they want us to help pay their bills, we’re going to cut up their credit card,” says Michael Steel, a spokesman for House Speaker John Boehner. And if Obama balks at the cuts? “We’ll see.”
