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| House Minority Leader Nancy Pelosi of Calif. applauds after handing the gavel to House Speaker John Boehner of Ohio who was re-elected as House Speaker of the 113th Congress, Thursday, Jan. 3, 2013, on Capitol Hill in Washington. |
WASHINGTON (AP) -- Congressional leaders on Sunday showed no signs of emerging from their corners to resolve the next step in the financial crisis, with Democrats still talking about higher taxes on the wealthy and the Senate's top Republican suggesting that a crippling default on U.S. loans was possible unless there were significant cuts in government spending.
"It's a shame we have to use
whatever leverage we have in Congress to get the president to deal with
the biggest problem confronting our future, and that's our excessive
spending," said Sen. Mitch McConnell, R-Ky.
Last
week's deal to avert the combination of end-of-year tax increases and
spending cuts known as the "fiscal cliff" held income tax rates steady
for 99 percent of Americans but left some other major pieces of business
unresolved.
By late February or early March,
the Treasury Department will run out of options to cover the nation's
debts and could begin defaulting on government loans unless Congress
raises the legal borrowing limit, or debt ceiling. Economists warn that a
default could trigger a global recession.
Also
looming are deep automatic spending cuts expected to take effect at the
beginning of March that could further erase fragile gains in the U.S.
economy. Then on March 27, the temporary measure that funds government
activities expires, and congressional approval will be needed to keep
the government running. It's one more chance to fight over spending
Lawmakers
said debt talks will consume Congress in the coming weeks, likely
delaying any consideration of an expected White House proposal on gun
restrictions in the wake of the Connecticut school shooting.
Republicans
say they are willing to raise the debt ceiling but insist any increase
must be paired with significant savings from Medicare, Medicaid and
other government benefit programs. President Barack Obama has said he's
willing to consider spending cuts separately but won't bargain over the
government's borrowing authority.
"One thing I
will not compromise over is whether or not Congress should pay the tab
for a bill they've already racked up," Obama said in his weekly radio
and Internet address.
Democrats said further
tax increases for the wealthiest Americans were still possible as
Congress looks to close the gap between revenues and expenditures.
Democrats point out that Obama has already agreed to significant
spending cuts, and that the latest deal only gets the nation to about
half of the revenue it needs to resolve the red ink.
"Trust
me, there are plenty of things within that tax code - these loopholes
where people can park their money in some island offshore and not pay
taxes. These are things that need to be closed. We can do that and use
the money to reduce the deficit," said Illinois Sen. Dick Durbin, the
second-ranking Senate Democrat.
House
Democratic leader Nancy Pelosi of California said she, too, wants to put
"everything on the table from the standpoint of closing loopholes."
But McConnell bluntly declared that the "tax issue is over" after last week's agreement.
"We don't have this problem because we tax too little; we have it because we spend too much," McConnell said.
Making
the rounds on the Sunday talk shows, McConnell was asked repeatedly
whether Republicans were prepared to see the nation default on its
spending obligations. McConnell said that wouldn't be necessary, so long
as Obama agrees to the spending cuts.
But at
one point, when asked by NBC's David Gregory whether the GOP strategy
will be to hold the debt ceiling "ransom" in exchange for spending cuts,
McConnell said it was a "shame we have to use whatever leverage we
have" to get the president's attention.
"None
of us like using situations like the sequester (automatic
across-the-board spending cuts) or the debt ceiling or the operation of
government to try to engage the president to deal with this," McConnell
said.
Sen. Lindsay Graham, R-S.C., didn't
dismiss the idea of allowing a partial shutdown of government until an
agreement can be reached. Texas Sen. John Cornyn and other Republicans
have floated the idea of a shutdown as a way of winning deeper spending
cuts.
"I believe we need to raise the debt
ceiling, but if we don't raise it without a plan to get out of debt, all
of us should be fired," Graham said.
Maryland
Rep. Chris Van Hollen, the top Democrat on the House Budget Committee,
said the Republican strategy amounted to: "Give us what we want ... or
we're going to tank the United States economy."
Pelosi
said she believes the president has enough authority under the 14th
Amendment to raise the debt ceiling without Congress' blessing. But the
White House has said previously that it does not believe that the
amendment - which says the "validity" of public debt shouldn't be
questioned - gives the president that power.
McConnell
spoke on NBC's "Meet the Press," ABC "This Week" and CBS "Face the
Nation." Pelosi was on CBS. Durbin and Graham appeared on CNN's "State
of the Union" and Van Hollen was interviewed on "Fox News Sunday."
