Some Dems Call for 'Clean' Extension of Debt Limit as Financial Doomsday Looms

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As the nation skids closer to its first-ever potential credit default next week, some Democrats are calling for a "clean" bill to hike the nation's $14.3 trillion debt ceiling so lawmakers return to focusing on more important business.

“We should raise the debt ceiling to recognize the debts that are already incurred, and we should do it cleanly so as to not throw the economy into a tail spin. Then we should debate all the issues in the budget,” Rep. Jerrod Nadler, D-N.Y.,said on the House floor Wednesday, arguing the debt limit should not be linked to reducing the nation’s deficits.

“We should raise taxes on the millionaires, the billionaires, the corporations, cut defense, and not try to tamper with people’s Social Security, and Medicare, and the things they depend on,” he added before sending out a press release titled: "Enough Political Jockeying; Let's Increase Debt Ceiling and Return to Congress' Vital Business."

Rep. Peter Welch, D-Vt., introduced a bill Wednesday that would provide a "clean" extension of the debt ceiling through the next presidential election next year.

"While we fully support continued efforts to reach a bipartisan agreement to significantly reduce the deficit, we believe it is essential to have legislation available for immediate congressional action that will prevent America's looming default," Welch said in a letter that drew more than 100 House Democrats as cosponsors to the bill.

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The demands, however, are likely to fall on deaf ears as even Senate Democrats and President Obama agree that any increase in the debt ceiling should be tied to spending reductions. However, those Nadler allies would also like increases in taxes, particularly on corporations and higher-income earners.

The GOP-led House votes Thursday on Speaker John Boehner’s plan to raise the government's borrowing limit in exchange for about $3 trillion in spending cuts over a multi-stage process. The proposal has gotten mixed reviews from the nation’s Republicans and has been trashed by Democrats.

A group business advocates, including a wide swath of industry associations and the U.S. Chamber of Commerce, sent a letter to lawmakers urging them to support Boehner’s bill or face losing more private-sector jobs.

“This legislation is necessary to extend the debt limit and avoid a default on the obligations of the United States,” the letter reads, warning that default could trigger “immediately higher” interest rates, stock market woes, higher oil prices and a “loss of economic growth and jobs.”

“While this legislation is not a solution for all of America’s debt and deficit problems, it is a necessary first step in the right direction.”

The endorsement counters arguments against the bill from conservative think tanks like Americans for Prosperity and the Club for Growth who say the speaker's bill contains “paltry” and "unacceptable" spending cuts.

The group of 115 businesses and associations acknowledged remaining “extremely concerned” about the federal debt despite their support for Boehner’s plan, but still urged Congress not to let the perfect be the enemy of good.

“While no legislation is perfect, the current proposal cuts spending immediately by more than the extension of the debt ceiling, provides an enforceable mechanism to produce additional spending reductions with extensions of the debt limit predicated on these cuts, and allows for a vote on significant procedural change to our budgeting process,” it said.