House Ways and Means Committee Chairman Dave Camp (R-Mich.) has been working the phones in conversations with top banking executives to explain the politics of next week’s planned debt limit vote in the House, sources tell POLITICO.
The vote will be on a measure to raise the $14.29 trillion debt limit with no spending cuts. With the GOP majority and many Democrats opposing this “clean vote” approach, it will fail.
But Camp has made the case to Wall Street that the vote is just a political marker intended to make clear that significant cuts will be required to get an increase through by August, when emergency measure run out and markets could begin to take possible default more seriously.
Camp’s calls come as the GOP walks a fine line between satisfying its tea party-influenced base, which fiercely opposes raising the debt limit, with a broader public concerned about the impact a default, or near default, could have on markets and the economy.
Polls suggest the public is very concerned about authorizing more government borrowing but also skittish about the prospect of threatening the rock-solid credit rating of the United States.
Treasury Secretary Tim Geithner and other members of the administration have said failure to raise the limit by Aug. 2nd could have disastrous consequences, including driving up interest rates, causing mass bank failures and a flight from the dollar.
At the same time, the administration has said it has faith that Congress will ultimately raise the limit.
Geithner has repeatedly noted that raising the limit simply ensures that the government pays for spending decisions made by previous congresses and does not represent new spending.
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