Lawmakers hope to settle debt debate by Fourth of July recess
U.S. Rep. Chris Van Hollen (D-MD) briefs the media after a meeting with President Barack Obama at the White House.
Jeremy Hobson: Lawmakers in Washington are working frantically to reach a deal to raise the $14.3 trillion federal borrowing limit in exchange for trillions of dollars in spending cuts. The Treasury Department has set an August deadline for a debt ceiling increase to keep the nation from defaulting. But lawmakers are trying to reach a deal before the Fourth of July recess.
Democratic Congressman Chris Van Hollen is one of the chief debt ceiling negotiators for his party and he joins us now. Good morning.
Chris Van Hollen: Good morning.
Hobson: So, will there be a deal to raise the debt ceiling and cut spending and/or raise taxes be the end of this week do you think?
Van Hollen: Well, we're working very hard to get an agreement in principle, either by end of this week or the end of next or reach the point where we recognize we can't get a deal. But everybody's working very hard to try and reach an agreement.
Hobson: And an agreement in principle you mean, sort of lay out a framework but not write it into law right away.
Van Hollen: That's right. It would take some time to translate whatever agreement in principle may be reached into law.
Hobson: What about this idea from the republican Senate leadership about a temporary increase in the debt limit to sort of satisfy the markets and then you have another debate on cuts later this year or early next year?
Van Hollen: Well, we're very focused on trying to raise the debt ceiling in a way that runs through the end of next year. We think having to do a series of debt ceiling increases actually creates more uncertainty in the marketplace -- better to get it done all at once if we can.
Hobson: If we're talking about trillions of dollars in cuts to go along with trillions of dollars in debt limit increases, how do you expect those to be felt by ordinary Americans?
Van Hollen: Whatever we do, we need to make sure that it has no negative impacts on jobs. I'm not saying people won't feel it, but the idea is to have the impact spread out over a period of time so you don't have a big jolt to the economy.
Hobson: If there were no republicans in Washington, would you preference be to just raise the debt limit with no cuts, no tax increases?
Van Hollen: If I'm forced to choose between a deficit reduction plan that hurt the fragile economy and was unbalanced compared to raising the debt ceiling, I would raise the debt ceiling. We need to make sure we do not default. That would create an economic catastrophe, not my words -- those of Ben Bernanke, the chairman of the Federal Reserve. And playing a game of chicken with defaulting on the debt is a very dangerous game.
Hobson: Democratic Congressman Chris Van Hollen, thanks so much for joining us this morning.
Van Hollen: Thank you.