“That's crazy talk,” said Sen. John Cornyn (R-Texas) when asked about a plan to declare the debt ceiling unconstitutional in an interview on Fox News Sunday. “It's not acceptable for Congress and the President not to do their job and say somehow the President has the authority to then basically do this by himself,” added Cornyn.
The national debt currently stands at more than $14 trillion. Treasury Secretary Timothy Geitner has warned that the debt ceiling needs to be raised by August 2, 2011 to prevent a default on the nation's debt obligations.
Both parties have agreed that about $4 trillion should be cut from federal budget deficits over the next 10 years. The main sticking point in negotiations to raise the debt ceiling, however, has been whether deficit reductions should come solely from spending cuts (the Republican's position), or come from a combination of spending cuts and revenue increases (the Democrat's position).
Obama said that a deal could be put together “on the back of an envelope,” in a June 29 press conference. In response, Cornyn complained that Obama had no plan. “Well let's see his envelope. I haven't seen it,” said Cornyn.
Democrats have proposed eliminating tax credits and deductions as a way to raise revenue without raising tax rates. Obama, for instance, in his June 29 press conference said, “if we choose to keep those tax breaks for millionaires and billionaires, if we choose to keep a tax break for corporate jet owners, if we choose to keep tax breaks for oil and gas companies that are making hundreds of billions of dollars, then that means we’ve got to cut some kids off from getting a college scholarship.”
Cornyn agreed that eliminating some of these “tax expenditures” is a good idea. Cornyn also argued, however, that he wants to reduce tax rates at the same time that deductions and credits are eliminated such that the overall plan is “revenue neutral.”
“The president's own fiscal commission recognized that our tax code is riddled with a lot of special interest loopholes and provisions that really don't make any sense anymore. We just had a very important vote about ethanol subsidies, which we voted overwhelmingly to repeal that... This is a fruitful area for us to work on in a bipartisan way,” said Cornyn.
Cornyn also said that while he favors tax reform, Congress does not have enough time to implement it before the August 2nd deadline to raise the debt ceiling. “We're willing to work with [Senate Majority Leader Harry Reid (D-Nev.)] to [pass tax reform legislation], again the problem is I don't know that we can get it done between now and August 2nd, but it should be something we do,” said Cornyn.
Former President Bill Clinton said in a speech on Saturday that President Obama should not "blink” on this issue and give in to Republican demands that deficit reduction should only come from spending cuts. Clinton also suggested that a “mini-deal” might be possible in which a small debt ceiling increase is passed until a more comprehensive solution is reached.
When asked about the possibility of a “mini-deal,” Cornyn responded, “the problem with a mini-deal is we have a maxi problem. Big problems are not going to go away if you cut a mini-deal. All it does is delay the moment of truth.” Cornyn agreed, however, that a mini-deal is possible. “Better now, than then, but if we can't, we take the savings we can get now and we will re-litigate this as we get closer to the election.”
Cornyn also announced that he would vote “no” on a resolution authorizing the use of force in Libya, which the Senate is due to take up on Tuesday. Cornyn said he would, however, be offering his own resolution on Libya.