While Congress recently voted to prevent the U.S. economy from teetering off the so-called "fiscal cliff," another budget showdown looms.
Despite taking action to extend the Bush-era tax cuts for household incomes under $450,000, congressional action on other aspects of the self-imposed “fiscal cliff” were kicked down the road, leaving D.C. a scant few months to reach agreement on how to avoid large across-the-board cuts.
A vote on raising the U.S. debt celling – the amount of money the country can borrow – is also coming up, and Republican members of Congress have already announced their willingness to use the vote as a bargaining chip – a replay of what happened in 2011, and lead to a credit downgrade of U.S, government bonds.
New U.S. Senator Ted Cruz has announced his willingness to put up a fight using the debt ceiling vote. Now his colleague, U.S. Sen. John Cornyn has gone one step further, saying a partial government shutdown may be in the cards.
Here’s what Sen. Cornyn said, in an op-ed published today in the Houston Chronicle:
If we don't reduce spending and reform our three biggest entitlement programs - Medicare, Medicaid and Social Security - then we will strangle economic growth, destroy jobs and reduce our standard of living … The coming deadlines will be the next flashpoints in our ongoing fight to bring fiscal sanity to Washington. It may be necessary to partially shut down the government in order to secure the long-term fiscal well being of our country, rather than plod along the path of Greece, Italy and Spain. President Obama needs to take note of this reality and put forward a plan to avoid it immediately.
President Obama has previously said raising the debt ceiling is non-negotiable, but he has also ruled out one potentially-risky end run around Republicans in Congress: minting a few trillion dollar coins to put more money in the government’s coffers.
