You want to get attention on Capitol Hill? Threaten to lower the U.S. government credit rating.
When Standard & Poor's lowered its outlook for the United States from "stable" to "negative" on April 18, the news shot through congressional offices. An already hot fight over raising the national debt got even hotter.
"S&P sent a wake-up call to those in Washington asking Congress to blindly increase the debt limit," House Majority Leader Eric Cantor said in a statement released minutes after the news broke. "House Republicans will only move forward on the president's request to increase the debt limit if it is accompanied by serious reforms that immediately reduce federal spending and end the culture of debt in Washington."
On the other side, Democratic Rep. Peter Welch, of the liberal Congressional Progressive Caucus, sent out a letter to Democratic leaders, signed by 114 House Democrats, demanding that Congress pass a debt-limit bill without any spending reforms at all. "Mr. Cantor should today abandon his dangerous plan to leverage America's duty to pay its bills to achieve a partisan advantage in budget disputes," Welch wrote.
Given all the maneuvering, you might think a debt-limit showdown is coming soon. It's not. Lawmakers, who are on a two-week Easter recess, have plenty of time before they are required to act.
In early April, Treasury Secretary Tim Geithner sent a letter to congressional leaders with his best estimate of when the United States will actually hit the $14.3 trillion limit on its borrowing ability. It will happen in mid-May, Geithner told Congress, but the Treasury Department can take "certain extraordinary measures" to put the deadline off a little longer. Geithner said there would be "no headroom to borrow" left by July 8.
Maybe Geithner was trying to prod lawmakers to act quickly, but when Hill politicos read that, they immediately thought: We have loads of time. "It doesn't hafta hafta be done until July 8," said one GOP Senate source. "We've got all of May and all of June." Remember, the last crisis, averting a government shutdown, was literally settled at the 11th hour on the day the government was to have closed.
That's why Geithner took to the talk shows recently to argue that there can't be shutdown-style brinksmanship this time. "If you take it too close to the edge, then people will start to wonder, really, what are we doing, what are we thinking," Geithner told ABC.
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