A series of short-term votes to increase the debt ceiling would turn out to be a tax increase on Americans, according to Sen. Mark Warner (D-Va.).
"I'm going back to Standard & Poor's, which said if you do a temporary increase, you'd probably see a downgrade of our debt. That would end up being a tax increase for every American," Warner said on Fox News.
Warner said a default on U.S. debt after the Aug. 2 deadline would also hit people's pocketbooks.
"If we have a default, that would be a tax increase for every American family in the immediate high interest rate costs and a dramatic decline in the stock market. That's not a good way to go about this," Warner said.
Leaders in the House and Senate went to work on competing plans to raise the debt ceiling after bipartisan talks faltered over the weekend. Speaker John Boehner (R-Ohio) is advocating a two-step approach that would increase the debt ceiling by about $900 billion and set up a commission to find another $3 trillion in deficit reduction.
The GOP's plan would likely require a second vote to raise the debt ceiling before the 2012 elections. Republicans say President Obama has been pushing for a larger deficit-reduction package to avoid that scenario.
"The president’s worried about his next election, but my God, shouldn't we be worried about the country?" Boehner said on Sunday. "I'm not worried about the next election. I told the president months ago: Forget about the next election."
On Monday, Rep. Edward Markey (D-Mass.) said Boehner and his fellow Republicans are now pushing for a short-term debt-ceiling increase to hurt the economy and blame it on Obama.
"The Boehner approach really intends to have another debate next year that is just as big and that’s their point. A big debate this year puts a cloud over the markets and the economic environment, and another debate next year will do the same thing to our economic recovery," Markey said.
Boehner is planning to unveil his two-step solution on Monday afternoon. Later, Senate Majority Leader Harry Reid (D-Nev.) plans to offer his plan to raise the debt ceiling with around $2.7 trillion in cuts.