Standard & Poor’s educates House GOP on debt limit

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Cut, Cap and Balance passed the House this week and would effect at least $6 trillion in spending cuts in a decade while not increasing revenue. That bill is dead on arrival in the Senate and President Obama has vowed a veto.

Some meeting attendees appeared to show increased openness to compromise on the debt ceiling and to  move off insisting on Cut, Cap and Balance.

Rep. Charlie Dent (R-Penn.) said he came away believing the caucus should be flexible in seeking a deal

“Speaking for myself, we have to remain flexible…not make statements about what we will never do,” he said.

Hayworth said she has faith in House leadership to come up with a compromise with the Senate and White House that will be “most beneficial” to members. She said she still strongly opposes any tax increases.

Charles Boustany (R-La) however said that he still believes that not raising the debt ceiling before Aug. 2 “won’t be catastrophic” although Treasury will have to make some choices about who to pay. From the briefing and another by Jay Powell of the Bipartisan Policy Center he believes that the huge rollover of the U.S. debt on Aug. 15 could be a different story, triggering a default.

Hayworth said that she did not have the same impression on dates.

Rep. Bill Huizinga (R-Mich.) said no one wants a default, although there could be some flexibility to sell assets for a short time after Aug. 2.

He said his belief in Cut, Cap and Balance was reaffirmed by S&P saying the U.S. could still face a downgrade even if the debt ceiling is raised, if there is not debt plan in place.

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