Toomey Downplays Debt Limit Worries

By Philip Bunnell

Senator Pat Toomey (R-Pa.) said Wednesday that the U.S. won’t necessarily experience an economic catastrophe should Congress fail to authorize an increase in the nation’s debt limit this summer.

Speaking at the American Enterprise Institute, the Pennsylvania Republican downplayed the impacts of not raising the borrowing limit by August 2, the date by which Treasury Secretary Tim Geithner told lawmakers they must act.

“I want to say categorically that is absolutely false. Failure to raise the debt limit upon the deadline submitted by the Treasury Secretary does not equate to a default on our debt at all,” Toomey said.

On Monday, Geithner announced that the federal government had reached its $14.29 trillion limit, but said that he would maneuver to buy Congress more time to reach agreement on a vote. Lawmakers are currently at an impasse over how to procede down the road of raising the limit, with Democrats calling for a “clean” authorization and Republicans demanding that spending cuts and reforms be included.

Toomey, who introduced a bill last month that would require Treasury to solely make payments on principal debt and interest should Congress fail to pass a vote, said that like most Republicans, he would only be willing to support more borrowing if it came with strings attached. He warned that simply raising the limit year after year is not a “permanent solution.” Toomey added that no Republicans would support a bill that contained tax increases as a means of generating revenue to pay down the deficit.

Treasury officials have indicated that the current limit would need to be increased by roughly $1.9 trillion.

On spending, Toomey defended the House-passed 2012 budget plan written by Budget Committee Chairman Paul Ryan (R-Wis.), which aims to reduce the deficit by cutting trillions in spending and overhauling Medicare and Medicaid. Toomey said he’ll vote for the Ryan plan if and when it comes to the Senate floor, calling it “very, very thoughtful, serious, [and] courageous.” He added that it is “the only idea… that actually does save Medicare.”