Backing off his earlier stance, House Majority Leader Eric Cantor (R-VA) is warning colleagues that the Treasury Department’s deadline to raise the debt ceiling before a catastrophic default is the real deal.
“Secretary Geithner feels August 2 is his deadline,” Cantor told ABC News in an interview released on Monday. “I don’t question the Secretary of the Treasury other than to say we’re trying to get in place real spending reductions — trillions of dollars of spending reductions — if the president wants us to increase the credit limit of this country by trillions of dollars.”
In recent weeks, Cantor and other top Republicans have openly questioned whether the White House’s hard date of August 2 was legitimate. Clearly concerned by their blithe treatment of what many economists warn is a looming crisis, the investment rating service Moody’s issued a tough warning last week that failing to raise the debt limit by even mid-July could lead them to downgrade US bonds. Party leaders have set a July 4 goal to reach a long-term deal.
Investors have been growing worried in recent weeks that the GOP Majority and especially its 87 Republican freshmen may be unaware of the consequences of their actions should a debt ceiling increase fail to pass. Asked about these concerns, Rep. Tim Scott (R-SC), the chair of the freshman caucus, told TPM last week he did not believe running up against the deadline would cause significant turmoil in the economy.
“I sincerely do not,” he said. “This date has gone from May to June to July to August 2. When you bring in $2 trillion in revenue in a short time you have time to put in place a strategy, but the White House can make it as painful as they want to make it if they play politics with the future of America.”
Benjy Sarlin is a reporter for Talking Points Memo and co-writes the campaign blog, TPM2012. He previously reported for The Daily Beast/Newsweek as their Washington Correspondent and covered local politics for the New York Sun.