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Debt ceiling showdown offers dismal options

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    Raise borrowing limit or default on payments

  • Duration 5:03
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What a grim picture of the showdown over the debt ceiling about to get a bit more dismal White House saying it has no plan -- in the debt fight.

Challenging Republicans allow them to borrow more money or allow the country to default on its loans sixteen trillion in debt getting higher by the second folks on the clock there.

Republican senator Mike Lee has a vote on this you talk today sir good morning to you.

In Salt Lake City more thank you for coming back here no backup plan according to the White House in addition Treasury Department says there is no plan -- When you think about that.

Well that's a problem too often in Washington -- -- between kind of a -- of false choice.

-- presented with a choice that says OK either take no cuts at all and raise the debt limit.

Or you raise the debt limit with -- promise of cuts that may never transpire.

And that kind of cut simply won't cut it anymore hardworking Americans deserve better than this and all of the programs that they rely on are placed in jeopardy.

By our reflexively raising the debt limit without putting in place permanent structural spending reform.

What do you think will happen here everybody is trying to figure it out I guess it'll be sometime about mid February we -- that C.

I guess I guess something develop what your best guess.

Well one of the things that we will see happening is that people on the other side of this those who want us to just.

Our raise the debt limit as if we were voting on -- motherhood appreciation resolution.

Will tell us that if we don't raise it and if we don't raise it immediately or if we.

Raise it only.

On the basis of permanent structural spending reform that that will somehow amount to a default.

We've got to remember that this is not true.

If we fail to raise the debt limit that will bring about some problems it would bring about a significant shortfall on revenue for the government.

But that is different than it the fault but people -- what happens.

If we don't -- the interest as it accrues on our national debt that's not going to happen we have more than enough revenue coming in each month.

It's -- cover that self.

That the politics of this could be damaging.

You know the White House -- blame the Republicans I don't know if you saw Politico earlier today but it suggests in the house Republicans are.

Are entertaining the idea to allow default or shutting down the government.

What you think about that.

Well again what we we have to distinguish between deep fault which is what happens if we don't.

Pay the interest or national debt as it accrues.

And failing to raise the debt limit.

That the latter simply means that we would have to spend though sixty or seventy cents on the dollar of what we're doing right now.

Elegant.

That could cause some real problems but that is very different than a and we've got a shy away from that kind of hyperbolic language so that we don't confuse the American voter and I thinking that I'm running it would people.

I sort of just talking about this till I mean it invites confusion and end -- itself.

And I I guess the fear I'm from the Republican side is not to take the brunt of the blame here.

If the story is accurate that half of the members the Republican House are willing to.

Prepared to allow -- -- according to this report.

I don't know if it's true or not but that's was being pregnant but how do you make sure.

That you get to eat you get the -- answers so that Republicans don't take the fall.

Like I think the way we get there is to come up with a real meaningful alternative something like the cut cap and balance approach that I introduced.

In the senate in the summer of 2011.

And what that means is that we say okay we'll look we acknowledged that the need to raise the debt limit.

But weren't going to raise it without putting in place some kind of permanent structural spending reform.

Because these simple cuts these cuts that promised to transpire but never in fact do are are not going to do the job anymore.

And we're gonna face another credit rating downgrade I fear if we just raise it reflexively again without changing the way that Washington spends money and more importantly the way Washington.

Borrows money have you follow what's going on in California and the governor Jerry Brown to raise a lot of taxes out there but now there.

A lot of stores have been written in California about how -- moving from deep in the red.

Into the black and it's come at a very high price for a lot of people in California.

Is it likely that Democrats start to sell that story.

To convince people that spending is not the way sorry spending cuts are not the way to go but raising more revenue more taxes issues.

-- look I'm certain that that's coming there is no question in my mind that that's coming.

But I can also assure you bill that what's coming from the other side is that.

In the long run that hurts economic growth in the long run that's going to bring about less revenue rather than more.

Because what you're doing there is you're taking money away from job creators ultimately you're going to be killing jobs.

That's gonna bring about less revenue and everyone hurts as a result of that you know it's not just those at the top end of the economic scale.

It's those that along every -- into the spectrum.

And especially those four or hardworking Americans living paycheck to paycheck that's who those tax.

Increases really hurt in India and the government loses as well senator thank you for your time because --

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