Most See Damage If U.S. Debt Limit Not Raised

Washington (AP) -

House GOP may seek short-term debt limit extension

Most Americans think jarring economic problems will erupt if lawmakers fail to increase the government’s borrowing limit. Yet they’re torn over how or even whether to raise it, leaning toward Republican demands that any boost be accompanied by spending cuts.

According to an Associated Press-GfK poll, 53 percent say that if the debt limit is not extended and the U.S. defaults, the country will face a major economic crisis. An additional 27 percent say such a crisis would be somewhat likely, while just 17 percent largely dismiss the prospects of such damage.

Separately, Republican officials said Wednesday that GOP lawmakers may seek a short-term extension of the debt limit, thus avoiding a default as early as next month by the U.S. Treasury while they try to negotiate spending cuts with President Obama over the next few months. “The worst thing for the economy is for this Congress and this administration to do nothing to get our debt and deficits under control,” said Rep. Paul Ryan, chairman of the House Budget Committee.

The poll’s findings echo many economists’ warnings that failure to raise the debt ceiling and the resulting, unprecedented federal default would risk wounding the world economy because many interest rates are pegged to the trustworthiness of the U.S. to pay its debts. Obama and many Republicans agree.

When asked which political path to follow, 39 percent of poll respondents support the insistence by House Speaker John Boehner and Senate Minority Leader Mitch McConnell, that deep spending cuts be attached to any measure increasing the debt ceiling. Thatmore than the 30 percent who back Obama’s demand that borrowing authority be raised quickly and not entwined with a bitter fight over trimming the budget.

An additional 21 percent oppose boosting the ceiling at all.

The survey was conducted as the two parties gird for a debt-limit battle that is likely to dominate the next two months. The fight is sure to underscore partisan differences over how to curb federal deficits that have surpassed $1 trillion for four straight years. Obama insists that besides spending cuts there should be more tax increases on the wealthy, which the GOP opposes.