WASHINGTON -- The Chamber of Commerce sent a letter to Congress on Friday urging legislators to quickly raise the debt ceiling, while also warning of catastrophe should the government continue spending at its current rate.
The Chamber, which represents business interests, helped elect many of the Republican members of Congress who are now threatening to vote against raising the debt ceiling. Republicans are demanding major cuts to government spending and long-term programs in return for their support.
But as the federal government approaches its borrowing limit, the Chamber came out in support of swift action to raise the debt ceiling to avoid damaging the United States’ credit rating. The debt ceiling, a Congressional limit on the amount of loans that can be taken on by the Treasury, is now set at $14.29 trillion. Treasury Secretary Timothy Geithner said in a letter to Congress earlier this month that the government will reach that limit by mid-May, but can avoid defaulting on its loans until early August by taking “extraordinary measures.”
Waiting until close to August to raise the debt ceiling could wreak havoc on the markets, the Chamber warns in its letter.
“Failure to raise the debt by that time would create uncertainty and fear, and threaten the credit rating of the United States,” wrote R. Bruce Josten, the Chamber’s executive vice president for governmental affairs.
Ratings agency Standard and Poor’s announced in April that it could downgrade the government’s credit rating if Congress does not form a long-term plan for dealing with the nation’s debt.
Many politicians have said the debt ceiling deadline is an opportunity for coming up with such a deficit-reduction plan. Although the Chamber writes that it supports spending cuts, it also urges a quick resolution of the debt ceiling issue, which seemingly points to a clean vote to raise the debt ceiling while lawmakers work on a more complicated long-term plan.
“The Chamber believes the time for spending reform is now and that Congress must make more judicious spending decisions,” Josten wrote. “The Chamber urges Congress to raise the current debt ceiling as expeditiously as possible.”
Still, the Chamber offers some suggestions for a deficit-reduction plan, which lawmakers are attempting to create during a series of meetings with the White House in the coming weeks. Similar to the ideas put forward by House Speaker John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.), the Chamber writes that it supports cuts to entitlements over revenue-increasing measures.
“The Chamber believes it is imperative that any path to deficit reduction focus on growing the economy and the tax base and cutting spending, especially mandatory spending, rather than shortsighted tax increases,” Josten wrote.