White House Wants to Raise Federal Debt Limit

Chief White House economist warns Congress must increase federal debt limit or economy will get worse.

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BY Kenneth R. Bazinet

WASHINGTON - The White House's chief economist is warning there'll be a worse catastrophe than the 2008 financial meltdown if Congress doesn't increase the government's credit limit.

"I don't see why anybody's talking about playing chicken with the debt ceiling," said Austan Goolsbee, the chairman of the White House Council of Economic Advisers.

"If we get to the point where you've damaged the full faith and credit of the United States, that would be the first default in history caused purely by insanity." he told ABC's This Week.

Goolsbee urged Congress to raise the debt limit, but many new Tea Party-influenced Republican lawmakers and mainstream conservatives trash the idea of raising the cap on the amount of debt accrued by the federal government. [Read more about the deficit and national debt.]

Tea Party darling Rep. Michele Bachmann (R-Minn.) said on CBS' Face the Nation that the message from voters was "stop spending money that you don't have."

"I am not in favor of raising the debt ceiling," Bachmann said.

[See who donates the most money to Bachmann.]

The $13.9 trillion national debt is approaching the $14.3 trillion debt ceiling. Congress will likely consider raising the ceiling this spring.

Pat Toomey, a conservative ex-congressman from Pennsylvania elected to the Senate in November, said severe spending cuts must be on the table in the new Congress or he won't support raising the debt level.

"We are on a disaster track," Toomey warned on NBC's Meet the Press.