Earlier this week, Fed Chairman Ben Bernanke warned against "brinkmanship" over the debt ceiling, saying: "Even a short suspension of payments on principal or interest on the Treasury's debt obligations could cause severe disruptions in financial markets and the payments system." (See: Debt Ceiling Uncertainty: Big Banks Take Evasive Action)
Congressional Budget Office Director Doug Elmendorf agrees, calling the political hankering over the debt ceiling "a dangerous gamble."
As has been widely reported, here and elsewhere, House Republicans have refused to raise the debt ceiling without a corresponding decrease in government spending. Today, Vice President Joe Biden led another round of talks designed to break the impasse and Sen. Jon Kyl (R-Az.) told reporters July 1 is the new target date for a deal. On Saturday, President Obama is scheduled to play golf with House Speaker John Boehner (R-Oh.), presumably with a goal of hammering out an agreement.
Getting conservative House Republicans to agree to a deal has been the focus to date, certainly in the press. But Senator Bernie Sanders (I-Vt.) says support from the left is not guarantee.
"If what the President ends up agreeing to is a deficit reduction package that does not ask the wealthy and large corporations who are doing phenomenally well…to be part of the equation, I am not going to vote to raise the debt limit," Sen. Sanders says in the accompanying video.
The Republicans are "blackmailing the American people," Sen. Sanders says. "The Republican position is the only way we can move toward deficit reduction is by making savage cuts on the needs of working people, low income people, people who are stick, the elderly and the children. The vast overwhelming majority of the American people say that's absurd."
Among other surveys, Sen. Sanders cited a recent Boston Globe poll showing 54% of New Hampshire Republicans support higher taxes on the wealthy to help pay for deficit reduction.
Sen. Sanders says he will only support a budget agreement that calls for "shared sacrifice," meaning at least 50% of the cost is borne by wealthy Americans and corporations.
"The reality is: unemployment is sky high, standards of living for the middle class is going down, and our Republican friends are saying 'those are the people who have to sacrifice,'" he says. "This President has got to finally stand tall and tell the Republicans 'sorry, it can't be a one way deal. Your friends on top are going to have to contribute to deficit reduction.'"
For additional coverage of the debt ceiling debate, see:
- Congressional Budget Office Director
- The Republicans
- Fed Chairman Ben Bernanke
- Vice President Joe Biden