Congress returns to debt limit battle

Just one day after President Obama’s inauguration, Congress returned to the fight over whether to raise the nation’s borrowing limit.

Many Republicans are unwilling to extend the debt limit, and Congressman Don Young won’t commit either way.

In the last news conference of his first term, President Barack Obama made clear – Congress needs to raise the debt ceiling so the government can meet its obligations.

“The issue here is whether or not America pays its bills,” President Obama said. “We are not a deadbeat nation.”

Last week, House Republican leaders dropped their official opposition to what’s called a “clean debt ceiling increase” – meaning they won’t require any spending cuts to accompany the bill.

But they won’t cede too much power to the president. Instead of a long-term extension, which the president wants, leaders opted for a three month stop-gap. That gets the nation through two other major fiscal fights – the across the board spending cuts scheduled to start March first, and the expiration of a bill funding the government.

That bill, known as the continuing resolution, will end March 27.

The House GOP formulated their new plan at a weekend retreat in Williamsburg, Virginia. A retreat, Congressman Don Young skipped. He normally supports the party leadership, but this time around, that’s no guarantee.

“I am not sure I’m going to vote for it. I’m not really happy with the idea that we said weren’t going to do it unless we cut spending. And if we don’t do it now are we going to do it when sequestration takes effect? Sequestration itself will probably be more damaging than working out a deal,” Young said.

The Tea Party lost Congressional seats in the past election, but those who remain are as vocal as ever, and pose a hefty threat to Republican leaders.

Tea Party Congressman Thomas Massie, a Republican from Kentucky, says like Congressman Young, it’s still possible for him to support the bill.

But he gives every indication he’ll vote no.

“If you vote for a clean, three month debt extension, and you say you vote on principle, then what set of principles keeps you from voting for six month debt extension clean? Or a one year extension clean? Or three months from now when they ask for another extension? How can you say you’ll never to that when you just did it three months ago?,” Massie said.

Senator Lisa Murkowski has said that Congress should not tie the debt ceiling to spending cuts, and that’s unlikely to happen in the Democratic-controlled Senate. Senate leaders indicated today the upper chamber will pick up whatever the House passes.

“If the House proposal takes us beyond the discussion so we can have a little bit of breathing room, that’s worth looking at,” Murkowski said.

The president issued a statement late this afternoon saying he would not veto a three month extension, but it does little to quell the concerns of lenders, business owners and investors.

That’s something Senator Murkowski agrees with – three months just doesn’t provide the certainty the economy needs.

“No. No. Probably more than there is right now though,” Murkowski said.

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