No debt ceiling crisis? Obama economic adviser sees investment boon.
A boost to long-term investment in the US may result, now that Congress appears poised to raise the national debt ceiling without provoking another showdown, says Gene Sperling of Obama's National Economic Council.
Washington — Gene Sperling, director of President Obama's National Economic Council, responded hopefully to news that House Speaker John Boehner will allow a vote to increase the government’s borrowing cap without attaching conditions sought by some Republican legislators.
Word of Speaker Boehner’s decision came Tuesday during a Monitor-hosted breakfast for reporters with Mr. Sperling, who will leave the White House next month after having served as National Economic Council director in both the Clinton and Obama administrations.
His hope? That "we as a country have now reached a consensus that ... the tactic of threatening default or threatening the full faith and credit of the United States for budget debates is over, off the table, and never to happen again.” If the possibility of a government financial default is no longer part of the debate over the debt ceiling, “that would, I think, be a boost for confidence and long-term investment in the United States,” Sperling added.
Boehner’s decision to allow a vote on the debt ceiling, as soon as Tuesday evening, with no legislative strings attached is a reversal from the plan he had laid out Monday evening, in which he linked raising the debt ceiling to reversing a measure that cut pension benefits to younger military retirees. Now, "we'll let the Democrats put the votes up," the speaker said Tuesday morning. "We'll put a minimum number of [GOP] votes up to get it passed."
The change came after conservative House Republicans were less-than-enthralled with that linkage in Boehner’s plan. Repealing the pension measure would have cost $7 billion over the coming decade, the Congressional Budget Office estimates. "Right now we've got a debt-ceiling bill that increases spending, which is diametrically 180 degrees opposite of what we were battling over just two years ago – where the question was how much in spending cuts we were going to get," Rep. Mo Brooks (R) of Alabama told The Associated Press.
The Obama administration is “supportive of efforts to grandfather current recipients” of the pension benefits, Sperling said. But the White House is opposed to “ransom” to pass the debt limit, he added.
Sperling is the first person to serve two presidents as director of the National Economic Council. Asked to compare his service in the Clinton and Obama administrations, he stressed the differences in the Republican Party then and now.
“In the Clinton administration, what was often most difficult was having [to go up against] a unified and strong opposition, “ Sperling said. “This time around, you learn the challenges of having a divided opposition when you want to get things done." Even when parts of the opposition leadership today want to reach a budget agreement, "it is hard for them to stay at the table because [their members] are not unified enough to stay at the table and finish an agreement.”
Material from the Associated Press was used in this report.