FACTBOX-Debate looms over U.S. debt limit

Jan 5 (BestGrowthStock) – A top item for the new U.S. Congress
[ID:nN05278085] is the federal government’s borrowing limit, a
potential flash point for freshmen Republicans backed by the
fiscally conservative Tea Party movement.

The debt ceiling was last raised in February 2010 to $14.3
trillion. The Treasury Department expects to reach that mark
sometime in the first or second quarter of this year.

Deficit hawks have talked about using the issue to exact
spending cuts from the Obama administration, while the White
House has warned of dire consequences for the United States if
the issue becomes engulfed in partisan politics.

Here are quotes on the issue from members of President
Barack Obama’s administration, the House of Representatives and
the Senate, as well as private analysts:

REPRESENTATIVE PAUL RYAN, INCOMING REPUBLICAN CHAIRMAN OF
THE HOUSE BUDGET COMMITTEE

“I want Washington to actually do things to get spending
under control. So I’m not interested in raising the debt
ceiling on the hope that a promise will be fulfilled at a later
time.”

“I’m only interested in raising the debt ceiling if we get
concessions on spending, on real controls to get our fiscal
situation turned around and headed in the right direction.”

“There’s a lot of options that we have at our disposal on
different kinds of controls. I think we should put caps on
spending.”

AUSTAN GOOLSBEE, CHAIRMAN OF THE WHITE HOUSE COUNCIL OF
ECONOMIC ADVISERS

“The debt ceiling is not something to toy with. If we hit
the debt ceiling, that’s essentially defaulting on our
obligations, which is totally unprecedented in American
history.”

“The impact on the economy would be catastrophic. I mean,
that would be a worse financial economic crisis than anything
we saw in 2008.”

“If we get to the point where you damage the full faith and
credit of the United States, that would be the first default in
history caused purely by insanity.”

WHITE HOUSE SPOKESMAN ROBERT GIBBS

“It is important to approach the upcoming vote … on the
debt limit in a way that is responsible and in a way that
doesn’t threaten the full faith and credit of our government.”

RAND PAUL, NEWLY REPUBLICAN SENATOR FROM KENTUCKY AND TEA
PARTY FAVORITE

“A lot of us think that raising the debt ceiling should be
linked to a balanced budget rule. And then, if you want us to
vote to raise the debt ceiling, promise in law that you will
balance the budget from here on after.”

“The people are tired of it. The people don’t want to add
more debt. The people are worried about the debt and what it
does to our economy.”

REPRESENTATIVE RON PAUL, FATHER OF RAND PAUL AND INCOMING
REPUBLICAN CHAIRMAN OF A PANEL OVERSEEING THE FEDERAL RESERVE

“There’s always a default. He (Goolsbee) is just talking
about a different type of default.”

“Every year we default because we just print the money and
pay our bills with cheap money. Not raising the debt limit is
admitting that we’re in default and cheating people all the
time.”

“I don’t see this entirely as a budgetary problem. I see
this as a philosophy of government problem. If you don’t repeal
the welfare-warfare state to get rid of the incentive to do
this, you can’t deal with this … and right now we’re at a
point where there is so much momentum there won’t be any
significant cuts until we have a financial dollar crisis. And
that’s what’s coming.”

DAVID MALPASS, PRESIDENT OF THE FIRM ENCIMA GLOBAL ECONOMIC
RESEARCH FIRM

“At the end of the day, they’re going to have to increase
the debt ceiling. The Republicans need to lay down what they
need in that bill in order to vote for it.”

“The ideal would be if they make structural spending
changes that give us some confidence that over the next 10
years, they won’t be as out of control as the last 10 years. So
what kind of limits, constraints, new checks and balances can
they put in place in the debt limit to give themselves — the
Republicans — some comfort for giving (the government) a blank
check?”

BILL GROSS, MANAGING DIRECTOR AT MONEY MANAGEMENT FIRM
PIMCO

“Above all, remember that all investors should fear the
consequences of mindless U.S. deficit spending as far as the
mantis eye can see. Higher inflation, a weaker dollar and the
eventual loss of America’s AAA sovereign credit rating are the
primary consequences.”
(Reporting by David Morgan and Alister Bull in Washington;
Editing by John O’Callaghan and Bill Trott)

FACTBOX-Debate looms over U.S. debt limit