WASHINGTON – An increase in the nation’s $14.3 trillion debt limit is unpalatable but necessary to avert a financial catastrophe, say all of Maine’s members of Congress.

But three of the delegation’s four members favor linking the vote on the debt ceiling to federal spending cuts.

When Congress reconvenes next week after its spring recess, the debt ceiling debate will be front and center, and there won’t be much time to forge a deal: Treasury Department officials have said that the current debt ceiling will be breached on May 16, and that technical maneuvers to keep the federal government from going into default can work only until early July.

President Obama and many Democrats have urged Republicans to go along with passing a “clean” increase in the debt limit and negotiating future budgets and spending cuts separately, noting that financial markets and credit rating agencies already are roiled by the prospect of a debt limit impasse and potential default.

Standard & Poor’s, one of the main rating agencies, recently shifted its credit worthiness outlook for the U.S. from “stable” to “negative,” expressing concerns that Congress and the White House won’t make a deal.

Republican Sen. Susan Collins of Maine said in an interview this week that “the best way toward real reductions in spending is by putting a procedural straitjacket around the budget” as part of a debt ceiling deal.

She said one way to do that could be a proposal by GOP Sen. Bob Corker of Tennessee and Democratic Sen. Claire McCaskill of Missouri to gradually cap federal spending at a percentage of the nation’s $15 trillion gross domestic product.

Corker and McCaskill want to set that cap at the 40-year historical average of 20.6 percent. Federal spending now is nearly 25 percent of the gross domestic product, according to George Mason University’s Mercatus Center for research.

“I am still looking at what the percentage should be and how the mechanism (of how to cut to achieve the cap) would work,” Collins said, but “that approach, to me, appears to be a good one.”

Collins said she’s open to considering other approaches.

“We cannot allow the United States to default on its obligations,” she said. “But we cannot ignore the face that our unsustainable debt also has very negative consequences that are going to catch up with us sooner rather than later.”

Sen. Olympia Snowe, R-Maine, called the recent Standard & Poor’s rating revision a warning that “we need to work harder to address the debt and deficit crisis. If that downgrade isn’t a wake-up call, what is?”

In a prepared statement, she said, “When the debt ceiling question comes to a vote, I will make my decision on the basis of the progress we are making on our government’s budgetary and debt problems. In view of the enormous deficits we have experienced over the last three fiscal years, the upcoming debt ceiling vote must serve as an impetus for the president and Congress to grapple with the federal debt on a bipartisan basis.”

Among Maine’s lawmakers, only Democratic Rep. Chellie Pingree says lawmakers should pass a “clean” debt ceiling increase, with no link to federal spending. She signed on to that position along with 113 other House Democrats in a letter written by Rep. Peter Welch, D-Vt.

“It is a painful process,” Pingree said. “No wants to think about the fact that the country is further in debt. I don’t want to have to raise the debt ceiling. (But) most members, in their hearts, know they have to vote for a debt ceiling increase.”

The issue of raising the debt limit is about “our full faith and credit, how the rest of the world looks at us, and it has a huge impact on our economy,” Pingree said in an interview this week.

The second-term lawmaker noted that she was not in Congress when the Bush-era tax breaks were approved and wars were launched in Iraq and Afghanistan, “but I can’t say now I won’t pay for it.”

Maine’s Democratic Rep. Mike Michaud, a member of the Blue Dog coalition of fiscally conservative Democrats, said he agrees the debt ceiling must be raised, because it’s vital for the nation “to pay its bills.”

At the same time, the debt ceiling vote is an opportunity to explore how to at least begin to tackle long-term federal spending issues, including the deficit “drivers” of defense, Medicare and Social Security, and the Bush tax cuts for households with $250,000 or more in annual income.

Michaud is among the Democrats who have indicated they are amenable to some linkage between the debt ceiling vote and spending cuts.

“I need to see that long-term strides are being met to hold down our debt and pay down the deficit,” he said.

Michaud said he looks “at politics as the art of compromise and what can we do to get us closer to solving our debt problem, at the same time making sure there are not draconian cuts or huge tax increases or a combination of both.”

MaineToday Media Washington Bureau Chief Jonathan Riskind can be contacted at 791-6280 or at:

jriskind@mainetoday.com

 

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