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. No Agenda

    NEXTEL Fire Fighter solution to this impass
    House: Take current Draft Bill, raise debt limit to go through CY12
    House:Pass bill and send to Senate
    Senate:
    Pass Bill and send to President
    President signs Bill crisis over

    July 29, 2011 at 3:22 pm | Report abuse |
  2. Richard Anderson, CPA

    The rich do not pay taxes. The folks do. They do it every time they go to the store. The rich will always have more than the middle class and the middle class will always have more than the poor. You can not spent people out of poverty. They must lift themselfs out.

    July 29, 2011 at 3:23 pm | Report abuse |
    • Nick the Shuffle Destroyer

      Wow you are uneducated for a CPA........get mad.....next time do spell check if you wish to resemble a intelligent humanoid creature.....get mad Richard.....oh yes.....get MAD!

      July 29, 2011 at 3:27 pm | Report abuse |
    • Citizen Twain

      You can spend people out of poverty by giving them an education so that they can think to pull themselves out. Without education, nothing will help them. The only way for them to become educated is for someone to pay for it.

      July 29, 2011 at 3:32 pm | Report abuse |
  3. Post American

    If you want to cut the deficit you cut spending and raise taxes, which is what the POTUS said all along. There is nothing fiscally responsible about the Tea Party Patriots saying we should not pay our bills. This isn't rocket science.

    July 29, 2011 at 3:24 pm | Report abuse |
    • The Golden Rule

      This is a very important subject that very few people understand. There will always be varying degrees of knowledge about a subject as complex as this one – but the basic principles of supply, demand, the nature of money/credit, and fractional reserve banking are simple enough for people to know how to vote intelligently. There really is no solution that does not involve some kind of default and people need to understand this! It's INEVITABLE. BANKRUPTCY is already here, it has been for years! We've just been fortunate enough to have very nice lenders! But our time as come. THose of you bashing "tea partiers" for "screwing Obama" for not raising the debt ceiling really need to do your homework. Start with something simple like the movie Freedom to Fascism and hopefully it will send you to the library like it did me! Grow up people. RON PAUL 2012.

      July 29, 2011 at 3:33 pm | Report abuse |
    • Would you compromise with terrorists?

      The "evil" tea party folks are being painted as not compromising because THEY SHOULDN'T COMPROMISE! Would you compromise with a terrorist cell that wanted to destroy you by saying "okay, don't kill all of us, but kill some of us"? Is compromise good when the principles are violated? How do we get out of debt by spending at the fastest rates in the history of the US? How does cutting $1T over ten years help when in that time just the growth over current $1.4T deficits would pass that many times over? The true rational minds already passed a bill- Cut, Cap, and Balance. Start the compromise THERE and not 3/4 of the way to the socialist's side only to "negotiate" to 9/10 and count it as a "victory" for America.

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

    Osama bin Laden may get his victory - the financial ruin of America, thanks to the take no prisoner mentality of the Republican Party. The Republicans plan robs from the poor to give to the rich.

    I hope America is watching and uses their vote more wisely in 2012. The Republicans aren't good for America. They create chaos and uncertainty whenever they gain power. Look at the markets and look at history.

    July 29, 2011 at 3:24 pm | Report abuse |
    • RealityMan

      I don't think the answer is "Republicans are bad. Democrats are good." – Socialism is only a step away people...........

      July 29, 2011 at 3:27 pm | Report abuse |
    • Richard Anderson, CPA

      This is to Nick the Shuffle Destoryer. I admit that spelling is something I am not good at but I can prove my point. I have done the research. All you can do is talk bad about people.

      July 29, 2011 at 3:33 pm | Report abuse |
  5. Duffminster

    The only budget that puts the protection of social security and medicare first is "The People's Budget," which make those who can most afford to pay, pay the most and puts ideas like big cuts to the Pentagon, canceling the Bush Tax cuts for the super rich and upping the contribution to social security in the loop. Everything else that is "in negotiations" is in regard to the the Debt Ceiling is being used as an opportunity to Undermine Social Security and Medicare. Any Democrat who votes for a measure which includes any undermining of these most important benefits for future generations is not a true Democrat and not a true representative of the people of the United States but a pawn for the super rich, who pay less than ever in taxes, are richer than ever and have benefited from 40 years of trickle up economics. Our politicians have consistently done the dirty work of nationless (multi-national) corporations that ship our jobs overseas, legalize tax evasion through "tax avoidance laws", and have given the rich an income tax rate on their main source of income (capital gains) which is below what the low end of the working class and middle class pay in income tax. The so called "Tea Party" is just a front operation for the super neo-cons/neo-feaudalist, radical libertarians like the Koch empire and their massive PR and brain washing political machine. For them, the destruction of a government that actually cares about its people is first and foremost and taking this nation into a depression seems to be high on their agenda. The Democrats need to draw a line in the sand at social security and medicare. Google "The People's Budget," that is in Congress now.

    July 29, 2011 at 3:24 pm | Report abuse |
  6. sparky

    Corporate America is making MORE money RIGHT NOW than they ever did in history. The PEOPLE are making LESS.

    SIMPLE MATH REPUBLIPUKES!!!!!

    July 29, 2011 at 3:24 pm | Report abuse |
    • Bob

      Join corporate america and stop crying, freeloader.

      July 29, 2011 at 3:27 pm | Report abuse |
    • nick

      Well your democratic president bailed them out almost 4 trillion multiple times so that they could get their 7-8 figure bonus..

      July 29, 2011 at 3:29 pm | Report abuse |
  7. Eve

    I would like to see no more tax exemption for non-profits. Most them make huge somes of money and use lobbists to get more money from the government. If all individuals are required to pay taxes then lll organizations should pay taxes.

    July 29, 2011 at 3:24 pm | Report abuse |
  8. David, CA

    Cut congressional pay and benefits. Let them feel the "sacrifice" they're expecting every US taxpayer to make. You can bet if they have to buy their own healthcare we'll see reforms happen at lightning speed. Also TERM LIMITS!!!! I think everyone is sick to death of these hypocritical lobbyist & corporate lapdogs.

    July 29, 2011 at 3:24 pm | Report abuse |
  9. RealityMan

    If you have money in the market, I'd advise putting it into a cash position ASAP.

    When these politicians see their 401K's drop 40%, they'll act accordingly. Until they are hit "at home", they'll sit on their hands. Simple as that.

    Cash is king.

    July 29, 2011 at 3:25 pm | Report abuse |
  10. eddie luna

    It is so sad to see that ego and personal agendas from our politicians in Washington have brought to its knees this great country of ours, I declared this my cyber protest against the thugs in Washington; starting by our president, all they do is weakening our country….

    July 29, 2011 at 3:25 pm | Report abuse |
  11. Ed

    Those Tea Party fools! Why would anybody want anything like a balanced budget and reduced spending? Who could come up with crazy ideas like that?

    July 29, 2011 at 3:26 pm | Report abuse |
    • Ted

      ummm.....Teabaggers?

      July 29, 2011 at 3:31 pm | Report abuse |
    • mike

      It is completely foolish to think that we can cut off our spending like a spigot, when we are currently borrowing 40 cents on teh dollar. So much of our budget is consumed by interest payments, that cutting out 40% now would be devastating to the country. We NNED roads, we NEED teachers, we NEEd cops.. yet these are the things that would have to be cut completely to the bone (or eliminated entirely) in order to meet a BBA threshold if one were enacted now. Try thinking about the ramifications of a BBA right now... has ANYONE said what would be cut if the BBA was enacted? Why would anyone get behind something when ZERO details of what they plan to cut have been discussed?

      July 29, 2011 at 3:42 pm | Report abuse |
  12. RCBinTN

    They need to 1) protect our country's credit rating and 2) develop a long-term plan that will keep the debt in check to protect our future. That can't happen in two weeks. They better get busy because the short-term increase in the debt ceiling they will pass in the next three days will only last until Christmas. And, I don't care who the TEA party thinks they are, they don't seem to give a damn about the current situation. Time for all these elected officials to get on the same BUS. Thank you.

    July 29, 2011 at 3:26 pm | Report abuse |
  13. Vlad

    Just take all the cuts, proposed by both sides:
    medicare, medicaid (there is too much free stuff going out),
    war, tax breaks (these two are obvious)
    and the rest. Slash 8 or more T, get out of debt, and fire all those politicans in the process for wasting time and money with useless speeches.

    July 29, 2011 at 3:26 pm | Report abuse |
  14. phil

    We need a balance budget amendment. Members of congress are not disciplined to manage our money without bankrupting the country. They are always worried about getting re-elected. Nothing else…

    July 29, 2011 at 3:27 pm | Report abuse |
    • Kathy

      i agree with your statement but must add that since this president took office the republicans have been totally dedicated to blocking his every move. i've never seen anything like it. obama has compromised too much as it is ~ he won't be leading if he continues to let the bullies bully ~ powerful as they are. he must stand firm this time.

      July 29, 2011 at 4:05 pm | Report abuse |
  15. haters gonna hate

    Republicans are dumb. Bush hates black people. That's what this is all about.

    July 29, 2011 at 3:27 pm | Report abuse |
    • Bob

      Word. Now off to buy a 40 with my food stamps

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

      That is an ignorant statement and is racist itself.

      July 29, 2011 at 3:36 pm | Report abuse |
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