July 29th, 2011
12:50 PM ET

The debt ceiling: Where you stand in battle

House Speaker John Boehner's debt plan was put on hold Thursday night after lacking the needed votes to pass, but he may try again Friday. The frustration about the inability of Congress and President Barack Obama to reach a deal to raise the debt ceiling and prevent a possible government default has sparked a firestorm of anger directed toward Washington.

But there's no shortage of people who believe they have the answer to solving the crisis or who is to blame for it.

As Washington struggles to reach a deal, CNN is listening to what you have to say about the debt fiasco as well thoughts from influential voices, politicians and analysts.

iReport: Your message to Congress

What is the solution for fixing the debt crisis?

With the both chambers of Congress seemingly unable to come up with a debt-ceiling solution, constitutional law professor Jack Balkin wrote about three ways Obama could bypass Congress and try to solve the crisis on his own.

"We are having a debt-ceiling crisis because Congress has given the president contradictory commands," Balkin said in a CNN.com opinion piece. "Congress has ordered the president to spend money, and it has forbidden him to borrow enough money to obey its orders." But Obama may be able to save the United States from defaulting, he suggests, perhaps by issuing two $1 trillion coins or selling the Federal Reserve an option on $2 trillion in property.

CNN.com readers jumped right into the conversation, discussing whether it would be the right move for Obama to sidestep Congress. One commenter named svscnn said: "I don't know if I'm relieved or concerned about some of the revelations in this article. While they all seem a bit shady, I suppose it's good to know that there are still some executive options on the table to keep us from going over the brink that Congress has brought us to."

Marc J. Yacht said he thinks that Obama is being “held hostage” and that he should stand his ground in the debt-ceiling debate.

“Use your power of the executive order to break the impasse, if you can,” Yacht told CNN's iReport. “Not raisng the debt ceiling undermines this country's stability. Equity and balance has to be the driving force in this debate.”

Skip Wininge, another iReporter, got so fed up with Congress’ inability to reform the tax structure that he has devised a plan of his own. He uploaded his thoughts to iReport, explaining, “Don’t pay for wars and tax cuts on the backs of senior citizens who barely get by on Social Security and Medicare. They have already paid their dues."

Another solution? "If far-right conservatives can't listen to reason, maybe they will listen to Ronald Reagan," CNN contributor John Avlon argues.

"Because Reagan had stern words for Congress when it tried to play political games with the debt ceiling in 1987. They still ring true today...," he wrote before quoting the late president's exact words. "Congressional Republicans should read that paragraph (from Reagan's speech) out loud twice before going to vote on the debt ceiling in the next few days. It is essentially the same argument Obama has been making. But in our current hyper-partisan environment reason doesn't resonate across party lines. Instead, there is too often an overheated impulse to oppose Obama at any cost. Hearing the same argument from the Gipper might inspire a needed sense of perspective."

Candy Grossi has someone else in mind that Congress should call for help. She said she is weary of the “Washington political game playing” because she doesn’t think that politicians really care what average Americans have to say.

Her advice to Washington? Enlist the help of people who are used to balancing their household budgets.

“Advice for Washington: Bring some normal housewives who have to really work a budget, putting food on the table ... ," she told iReport. "Maybe then our budget will get in line. We need people who don't have any special interest. We need people who really care for the good of our nation, which means our people (all of us).”

CNN also asked former officeholders for their views on how to resolve the debt crisis. What do they think should happen?

Former Sen. Arlen Specter of Pennsylvania said he thinks Obama should hold in reserve the prospect of using the 14th Amendment to get around the debt ceiling.

“This extraordinary assertion of executive authority could be justified because the Congress has, in effect, abdicated its constitutional responsibility to agree on legislation through the bicameral conference before the drop-dead date leaving a vacuum which must be filled if the government is to function,” he said.

Ex-Reagan budget director David Stockman said, “The crisis lies in the debt, not the ceiling. Kicking the can with a six months' ceiling increase is the worst possible alternative because it allows the politicians of both parties to continue making the big fiscal lie.”

Former Sen. John Danforth said the real issue is the size of government. He urges Congress and the president to agree on raising the debt ceiling and to make the 2012 election a vote on the size of government between Obama’s plan for a government that spends nearly 24% of the gross domestic product and Rep. Paul Ryan’s plan for a smaller government, amounting to about 20% of GDP.

“The appropriate size of federal spending as a percent of GDP will not be resolved by politicians without input from the American people. In other words, it will not be decided before the 2012 presidential election,” Danforth said.

Meanwhile, iReporter Valerie Bass, a Middleburg, Florida, teacher and the wife of an Afghanistan veteran, offers this advice to Congress: “This is not a game. Cut the benefits the politicians have as we can't afford them.”

Bass has a lot more to say in her impassioned iReport:  "My husband lost his health and his ability to have a normal life due to his deployment to Afghanistan. We also have two children in college and are counting every penny. We have given our future and our health for this country. We are the military families!"

Who's to blame for the debt-ceiling crisis?

Fareed Zakaria calls the government impasse a self-created crisis, saying the damage is already done.

"My basic point is that this is a crisis that we have manufactured out of whole cloth. We have created a circumstance in which the world doubts our credibility, rating agencies are thinking of downgrading our debt and the dollar's role as the world's reserve currency could be jeopardized," Zakaria writes. "Please understand that none of these things are happening because the United States is running deficits. There was no indication by any metric that the United States was having difficulty borrowing money one month ago. In fact, the world has been lending money to the United States more cheaply than ever before.

"We face downgrades and investor panic not because of our deficits but because we are behaving like deadbeats, refusing to pay our bills, pouting while the bill collector waits at the door."

Many iReporters said they are sick of the politics behind the crisis and want lawmakers to put aside their differences and just solve the economic problems.

Steve Rokowski said he is tired of elected officials “hiding behind statements” about how the American system of government works. Those elected officials are the most to blame, according to Rokowski.

“Compromise is essential to get things done," Rokowski told iReport. "We all have to do it daily in our lives; it’s more important for Congress as their decisions are supposed to be for the greater good of the country. Stalemate is not an option. I am tired of our government officials always hiding behind the statements that, 'This is the system our forefathers have put in place.' They didn’t set up a government that was this dysfunctional.”

Who's winning this fight?

Lawrence R. Jacobs, a professor and director of the Center for the Study of Politics and Governance at the University of Minnesota's Humphrey School of Public Affairs, takes a look at the implications across the board and who could walk away a winner or a loser in this war over the debt.

He said that Americans are turning against the GOP in the debt debate because of the party's insistence on cutting government programs only without any tax hikes. And Democrats are winning the argument on Medicare and Social Security. Obama also has a lot at stake here. His talk about the inability of government to get anything done implicates him, too, Jacobs argues. Any talk of a dysfunctional government is hurting his cause, he writes.

"The president's flagging of Washington's 'dysfunction' reinforces the distrust of government that many Americans harbor, oddly making it harder for him to rally support behind government programs such as Medicare and Social Security," he writes. "This may help to explain why the GOP is losing the debt-ceiling debate and yet three-quarters of Americans favor a constitutional amendment to balance the budget."

He adds, "The lessons moving forward are clear. Republican leaders intent on winning the White House and strengthening their position in Congress need to steer their party back to the views of mainstream America or squander what may be setting up as a propitious opportunity in 2012 to run against the 'in' party in a time of deep discontent. As for Democrats, they need to focus like a laser beam on the concrete programs that many Americans rely upon and steer away from the sweeping conclusions about government waste and dysfunction that undergird a genuine philosophical conservatism in America."

But Jeffrey Miron, author of "Libertarianism, from A to Z," writes this public spectacle is a blemish on both parties in part because neither side will concede on their big issues. Democrats won't accept that Medicare is the primary driver of the fiscal nightmare, he argues, and Republicans won't distinguish between two kinds of tax revenue that from higher tax rates and that from fixing tax loopholes.

"Will the Democrats and Republicans be able to set aside their prejudices?" asks Miron, a senior lecturer and director of undergraduate studies in Harvard University's Economics Department and a senior fellow at the Cato Institute. "Alas, both parties are doing what their respective constituents seem to want, so compromise will not come easily.

"But something must change, and soon. Otherwise, nothing will stop the U.S. fiscal train wreck."

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Filed under: Budget • Economy • Finance • Politics • Taxes
soundoff (1,803 Responses)
  1. edutron

    Dear United States: (EO, Senate, & Congressional body):
    Need to lower output versus input or increase revenue and lower output?

    Revamp military FUTURE IF programs. The U.S. Government spends an insane amount of money on programs that will never ever come to use
    including funding to private sectors that feed on the rules of government loans that produce NOTHING.

    Revamp HEALTHCARE. The United States is truly an IMPERIALISTIC nation. Yes, a patient needs to pay.
    STOP payment to ILLEGAL programs (ALL).
    TAX OIL imports (BP, SHELL, etc. , and mandate a cap on the fuel prices in extreme economic conditions like NOW) Its ugly, but hey, it’s our future.
    Social Security – leave it alone and DO NOT borrow or steal from the fund.
    Medicare – ARREST ANY and ALL fraud period. Initiate martial law on Medicare billing! It’s ugly, but hey, it’s our future.
    Lower taxes for domestic based business and initiate tax laws preventing international based business’s from using the United States as a money laundering machine.

    NO MORE free abortions and welfare programs for those that are able to work (believe me, they can work regardless of excuse).
    These people need to take responsibility. It’s ugly, but hey, it’s our future.

    NO MORE threat payments to countries who believe the United States is gutless. You know who we are talking about.
    The United States is now the aggressor, times have changed! (Remember, the needs of the many outweigh the needs of the few).

    NO MORE bailouts to business – PERIOD. That’s why we call our nation a Democracy and a REPUBLIC, not a SOCIALISTIC State. Stalin and MARX died a long time ago.
    China knows this and they are exploding in wealth thanks to our gutless monetary decisions.

    May I take charge of the GAO? The nation would become rich in the long run, believe me!

    After those iotas in order, we’ll work on frivolous benefits issued to Congressional members.

    Have a great debate, remember BE the ANSWERS, not the WHYS!

    July 29, 2011 at 1:35 pm | Report abuse | Reply
    • tommas

      "believe me, they can work regardless of excuse".... really, hard to work if there is no job

      July 29, 2011 at 1:38 pm | Report abuse |
    • McBain

      Adam Smith (capitalism) died a long time ago, too.

      July 29, 2011 at 1:42 pm | Report abuse |
    • pastorspet

      yes, lets make disabled people who because of their disabilities cannot work become homeless and hungry. Talk about not caring about anyone but yourself! There is fraud, but not everyone on welfare is a fraud. We need to remember that we are all in this together and punishing those who physically/mentally cannot work is morally wrong!

      July 29, 2011 at 1:44 pm | Report abuse |
    • freewilly

      I hear a lot of rants both in and out of Washington. Fact is, the US has already fallen, we just dont know it yet. Obama is a smart man, bummer he never got a chance.

      July 29, 2011 at 2:40 pm | Report abuse |
    • Owl96

      So the fact that my wife was comatose for six months was no excuse for her not working. What would you have hired her to do? Get off of your horse and stop speaking in generalities until you learn something.

      July 29, 2011 at 2:48 pm | Report abuse |
    • LadyAnon

      Tax money never did go to pay for abortions and no one has ever planned on it to. Just figured I'd clear that up for ya. One less thing to shout about.

      July 29, 2011 at 3:52 pm | Report abuse |
    • Americanus

      @McBain Would you have Marxist/Lenism?? If you do maybe you should ask those who survived the horrors of Stalinist USSR how well that worked out for them. The short answer is that it was nothing short of horrorfic. I know that there have been lies told that make it seem like a utopia. Also remember this, who won the Cold War. Enough said.

      July 29, 2011 at 4:06 pm | Report abuse |
  2. Linda

    If the Republicans can't strike a compromise, then I think that the government should withhold every single paycheck for the congress. They aren't worried about the crises....all they want to show is who thinks who is in power. Boehner should resign and every tea party member of congress should resign, because it's because of them not willing to bend that we are in this mess.

    July 29, 2011 at 1:35 pm | Report abuse | Reply
    • RestoftheStory

      You forgot the other half to your comment...and if the Democrats can't compromise?

      July 29, 2011 at 1:42 pm | Report abuse |
  3. david massey

    If we dont dismiss these 545 babies that we call government, we wont be around soon. The democrats never see long term and have got the debt too big to cure now. We new this would happen, just like cancer.

    July 29, 2011 at 1:36 pm | Report abuse | Reply
    • Jilli

      The democrats never see long term – and THEY got the debt too big to cure?

      Hey dave – did you sleep through the GW Bush years where the vast majority of this debt was incurred? Debt that was legislated by some of the very same people who are now acting against raising the debt limit?

      Two unfunded wars, an unfunded 7 trillion dollar medicare drug program and the bush tax cuts – Obama's dent is nothing compared to GW Bush and the republicans that enabled him.

      July 29, 2011 at 1:43 pm | Report abuse |
    • Jacob

      Jilli,

      Your comment is totally without fact, it's apparent you've been fed the democrat line and bought into it. You must have read it on an "opinion" article somewhere that GW Bush spent more then Obama. Here are the facts taken from the CBO on Bush vs Obama spending (source is NPR)

      "To put that into perspective, when President George W. Bush took office, our national debt was $5.768 trillion. By the time Bush left office, it had nearly doubled, to $10.626 trillion. So Bush's record on deficit spending was not good at all: During his presidency, the national debt rose by an average of $607 billion a year. How does that compare to Obama? During Obama's presidency to date, the national debt has risen by an average of $1.723 trillion a year — or by a jaw-dropping $1.116 trillion more, per year, than it rose even under Bush.

      How do Bush and Obama compare on closer inspection? Just about like they do on an initial glance. According to the White House's Office of Management and Budget, during his eight fiscal years, Bush ran up a total of $3.283 trillion in deficit spending (p. 22). In his first two fiscal years, Obama will run up a total of $2.826 trillion in deficit spending ($1.294 trillion in 2010, an estimated $1.267 trillion in 2011 (p. 23), and the $265 billion in "stimulus" money that was spent in 2009). Thus, Bush ran up an average of $410 billion in deficit spending per year, while Obama is running up an average of $1.413 trillion in deficit spending per year — or $1.003 trillion a year more than Bush."

      So in retrospect it took Bush 8 years to get his deficit numbers when it will take Obama less then FOUR years to meet and surpass Bush's numbers. Eye opener isn't it when you look at facts and not your dogma.

      July 29, 2011 at 2:16 pm | Report abuse |
    • Ted

      you obviously have no concept of what is going on in the world of politics.GW Bush screwed this country up.I think you were asleep pal.

      July 29, 2011 at 3:35 pm | Report abuse |
  4. MJ

    I SAY VOTE ALL OF THESE PEOPLE OUT OF OFFICE AND START OVER!

    July 29, 2011 at 1:36 pm | Report abuse | Reply
    • Owl96

      The next election is in November. We need to pay bills on August 2. Your suggestion does not solve our current problem. Just vote a small increase in the debt ceiling as a stand alone bill, and go to work on the other issues.

      July 29, 2011 at 2:52 pm | Report abuse |
    • tasaad

      That is a good idea, however, the same people who voted these morons in will be the same ones who vote the next morons in. In addition to that, these same voters will still expect lower taxes and more services.

      July 29, 2011 at 3:32 pm | Report abuse |
  5. Edward

    If we have to sacrfice, the we should all have to sacrfice including the wealthy Republican supporters who should gladly give up the George Bush tax cuts that got us into this mess, along with George Bush's two unfunded Wars. Hows that Goerge Bush thing working for ya now.

    July 29, 2011 at 1:36 pm | Report abuse | Reply
    • whatguy

      I agree, all need to sacrifice, but right now when we need to figure it out in a couple days is not the time to tackle the many issues with our tax laws, or in fact with what needs cut from the budget as that will be a necessary part of the sacrifice as well.

      What we need now is a bill passed raising the debt ceiling and if you add anything to it, make it a deadline for these things to be addressed by (say a year from passing date). You state that the debt ceiling is raised, but the US congress has 1 year to do their job on 2 major interconnected issues, a balanced budget and an overhaul of our tax system that is obviously broken with all the loopholes etc that even those who wrote it can't figure out. Vote that through so the government can continue to function and we don't screw over the tax payers anymore, then work on those things after, making them the top priority.

      July 29, 2011 at 1:42 pm | Report abuse |
    • Cliff

      Actually, the Bush tax cuts raised tax reciepts to new heights! You can raise the rate if you want, but you are simple minded if you think that will bring in more tax revenue. People change their behavior in response to tax policy.

      July 29, 2011 at 1:45 pm | Report abuse |
    • JennInIndiana

      Actually tax revenue fell when the Bush tax cuts were implemented. That is on top of all of the jobs that were lost during those wonderful 8 years. No matter how loud republicans scream and lie, there are always the facts that can be proven. I'm sorry, if I have to pay taxes on my $25K job, why does GE get away with nothing? I don't care how many jobs that they MAY produce, if you don't support the community around you then there is a serious problem. AND THAT IS THE SITUATION THAT WE FIND OURSELVES IN TODAY!!!!!! Get it together people

      July 29, 2011 at 3:05 pm | Report abuse |
    • Wrong

      Every person who receives a paycheck from GE pays taxes. Everyone who makes income from selling stocks in GE pays taxes.

      July 29, 2011 at 3:51 pm | Report abuse |
  6. Rbnlegnd

    The current crisis is not a debt crisis, it's a legislation crisis. Congress does not have a short deadline to resolve our massive overwhelming debt. Congress has a short deadline to approve increasing our debt ceiling. That's all. Just like in the past, it's easy. Present a bill before the house that says "we raise the debt ceiling to a high enough number to get us through a year or two." No riders. No political rewards for anyone. Just raise the debt ceiling. Then, in the course of normal business, work on the debt problem.

    When this "crisis" is past, however it gets resolved, anyone care to bet how long before congress passes a bill spending another huge pile of money we don't have? I would bet less than one day that congress is actually in session.

    July 29, 2011 at 1:37 pm | Report abuse | Reply
    • Don

      You are kidding yourself if you don't think that this overwhelming debt can't collapse the economy and in turn the Federal Government. Printing more money does NOT create more wealth. Take a look at Germany circa 1930. Those lessons are still very much applicable, no matter how many economic "theorists' claim differently.

      July 29, 2011 at 2:08 pm | Report abuse |
  7. Gerry E.

    Remember how the country felt right after 9/11? We need to remember that, unite and get this thing done!

    July 29, 2011 at 1:38 pm | Report abuse | Reply
    • Marcel - Atlanta

      I wish there was a like button... I'd click it for that comment.

      July 29, 2011 at 2:00 pm | Report abuse |
  8. A'mWatching

    Whick 401K? It quickly dissolved while the politicians played political "foolsball."

    July 29, 2011 at 1:38 pm | Report abuse | Reply
  9. Jilli

    Pass a clean bill – just as it's been done almost 90 times before.

    This manufactured crisis is going to hit the working class – those already hit the hardest – we're watching the value of our 401k's drop because of the clowns in the house. This nation is being held hostage by a minority of economically ignorant tea baggers – that represent a minority of the population. This nation has so many issues that need to be addressed and we're wasting a month on what used to be a routine housekeeping matter. Enough is enough already. Pass a clean bill

    July 29, 2011 at 1:39 pm | Report abuse | Reply
    • kc

      It already hit the working class.

      July 29, 2011 at 2:22 pm | Report abuse |
  10. Joe

    This is an absolute disgrace!!!! Maybe if we take the billions of dollars we are sending to foreign countries and use it to pay our bills we would not be in this mess. I am a democrat but that the President of our country would even begin to play the Social Security payments card to scare people is totally unacceptable.....again, take some of the billions we sent to a country like pakistan and use that to pay our seniors........Both parties are a disgrace to our nation.....

    July 29, 2011 at 1:39 pm | Report abuse | Reply
    • kman

      Absolute correct! No road scholar to realize that. No one ever talks about that. Take care of your own. This government is a sham....and stop the hand out to the ones who consider it a lifestyle as well.

      July 29, 2011 at 2:29 pm | Report abuse |
  11. kevinjkc

    Isnt there a direct relationship to the cut in government spending, that everyone agrees is needed, and an increse in unemployment?

    July 29, 2011 at 1:39 pm | Report abuse | Reply
  12. Scott Zettlemoyer

    Did Washington think the citizens were kidding when they sent a clear message to cut spending and no new taxes? But that would mean democracy and the US is an oligarchy masquerading as a democracy. The realization that we are not a democrary has caused great sadness. The stages of grief are somewhat similar for all. I'm just waiting for the angry action stage of grief to restore at least some semblance of a democracy.

    July 29, 2011 at 1:39 pm | Report abuse | Reply
    • JennInIndiana

      At what point will the Republicans realize that they do not speak for every American voter? I didn't vote for a Tea Party member. I didn't vote for a Republican. And the REpublicans don't even control the other half of the Legislative Branch. So it is high time that they realize that there are other people outside of their circles and they must consider us all in their plans for the future.

      July 29, 2011 at 3:11 pm | Report abuse |
  13. Brian

    Everyone loves to blame the Republicans when we have a President who cannot compromise himself and is to blame for large deficit issue. We can't keep handing out money like there is no tomorrow.

    July 29, 2011 at 1:39 pm | Report abuse | Reply
    • tommas

      Congress is in charge of this not the president, he is just trying to help

      July 29, 2011 at 1:43 pm | Report abuse |
    • Steve

      Obama IS NOT to blame for the deficit issue. How quickly all you so-called conservatives forget the enormous deficits created by the Bush Administration + Republican Congress.

      July 29, 2011 at 1:45 pm | Report abuse |
    • Modesto

      Don't push the president to get his big stick out

      July 29, 2011 at 2:56 pm | Report abuse |
    • AuntRachel

      The President was willing to sign off on things that would make his own party upset – but every time he showed any compromise it was rejected. It's hard to work with any party who , by their own admission, is only looking to ruin you.
      And THAT is a lot of the problem, the Republicans are so focused on their irrational hatred of the President they won't even consider a bill if he likes it.
      And as to the people mandating this – I didn't vote for any Tea party candidates either. Fortunately we didn't have any in my state for anyone to vote for – I like to think we're smarter than that.

      July 29, 2011 at 3:59 pm | Report abuse |
    • mateo

      Obama can't compromise?!? Where have you been and who is your president? Obama CONTINUALLY gives in to Republicans! That's why we don't have a Public Option when it comes to Health Care. That's why there was no fight to end the Bush Tax Cuts. How can Republicans continue to be so opposed to Obama when he has continued to follow so many Bush policies? We've renewed the Patriot Act. Guantanamo Bay is still open – what happened to closing it? We STILL have 2 wars going on.

      If you ask me, Obama AND the Democrats need to man up and start STANDING for something. Instead of continually pandering to Republicans. Democrats need to start appealing to their base instead of continually moving more and more to the right – trying to appeal to Independents and Republicans.

      July 29, 2011 at 7:35 pm | Report abuse |
  14. Sally

    It's called compromise! The republicans raised the debt ceiling many times during the Reagan and Bush administrations. There is too much at stake, it needs to go up. There need to be budget cuts and fixes but this is not the time. Deal with the debt ceiling instead of trying to tack the kitchen sink on!!!

    July 29, 2011 at 1:39 pm | Report abuse | Reply
  15. cay cross

    where are the adults??? we need a start-over party.

    July 29, 2011 at 1:39 pm | Report abuse | Reply
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