Add Congressman Sander Levin (D-MI) to the growing list of government officials and Wall Street titans to warn about the potential for economic catastrophe if the debt ceiling is not raised before the August 2 deadline.
House Republicans are "playing with fire" by declaring the intention to not raise the debt ceiling, Rep. Levin says. "It will be disastrous for everyone."
Rep. Levin is extremely critical of his Republican colleagues, including House Speaker John Boehner, for saying they won't vote to raise the debt ceiling unless accompanied by massive cuts in federal spending. "When the Speaker talks about '$2 trillion in cuts'; I don't know where he's getting that," Rep. Levin says. "No one is proposing responsibly how to do that in time to adjust the debt ceiling. I don't know why he's doing that. They're willing to have a crash in order to make a point."
Rep. Levin, the Ranking Member of the House Ways & Means Committee, agrees Congress must address spending and tackle the deficit. But they should be kept on separate tracks to avoid the "danger of an economic crash," he warns.
As discussed previously, the U.S. hit its $14.294 trillion debt ceiling on May 16, but Treasury Secretary Tim Geithner said the government can continue to make its debt payments until Aug. 2, thanks to "extraordinary measures." (See: U.S. Hits the Debt Ceiling: What Does It All Mean? )
Like most observers, Rep. Levin believes Congress ultimately will vote to raise the debt ceiling prior to the Aug. 2 deadline, predicting "wiser heads will prevail."
Still, he frets that simply waiting until the August 2 deadline is at hand could have major repercussions for the financial markets. "We [would] shake things up at a time when we have a fragile recovery," Rep. Levin says. "Why take a chance to undo that? It's irresponsible."
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