Obama Aide: Don't 'Play Chicken' With Debt Ceiling

January 3, 2011 - 12:19 PM

Austan Goolsbee

Obama adviser Austan Goolsbee testifies before the Senate Banking Committee on Jan. 15, 2009. (AP File Photo/Jose Luis Magana)

Washington (AP) - Some Republican lawmakers said Sunday they opposed raising the ceiling on the nation's debt without tackling government spending, and President Barack Obama's top economic adviser warned against "playing chicken" on the issue.

The federal debt is limited to $14.3 trillion, but the debt now stands at nearly $13.9 trillion and is growing daily. Congress last raised the debt ceiling in February 2010 and is expected to consider raising it again as early as March.

To some conservatives, refusing to raise the limit on the federal debt could be an effective tactic to force lawmakers into cutting spending and facing such contentious issues as the rising costs of Social Security, Medicare and other entitlement programs.

Austan Goolsbee, the chairman of the White House Council of Economic Advisers, said that refusing to raise the debt ceiling would essentially push the country into defaulting on its financial obligations for the first time in its history.

"The impact on the economy would be catastrophic," Goolsbee told "This Week" on ABC. "That would be a worse financial economic crisis than anything we saw in 2008."

Goolsbee added: "I don't see why anybody's talking about playing chicken with the debt ceiling."

While saying that defaulting would be "very bad" for the U.S. position in the world, Sen. Lindsey Graham, R-S.C., said he would not vote for raising the limit on the federal debt unless there were a plan in place for dealing with long-term obligations, including Social Security, and for returning to 2008 spending levels.

"This is an opportunity to make sure the government is changing its spending ways," Graham said on NBC's "Meet the Press."

Democratic Reps. Debbie Wasserman Schultz of Florida and Anthony Weiner of New York want to see how the new Republican majority in the House will handle the issue.

"The Republicans have come in saying that they're going to not raise the debt ceiling and they're going to allow the full faith and credit of the American people to go down the tubes," Weiner said on "Face the Nation" on CBS. "It's their ship to run now. That's the responsibility."

Rep. Michele Bachmann, R-Minn., appearing with the Democrats, asked people to sign an online petition to urge their representatives not to increase the debt limit.

"It's not good for anyone to shut the government down," she said. "That's why I think it's important for the Democrats who are so willing to spend money to now be a part of trying to figure out how we can be responsible."

Rep.-elect Mike Kelly, R-Pa., a car dealer elected to the House in November, spoke against the idea of the government spending money it doesn't have.

"Raising the debt ceiling, to me, is absolutely irresponsible," Kelly said.