GOP Senator Sees No 'Grand Bargain' on Debt Crisis

A Tea Party favorite in the Senate called President Barack Obama's refusal to debate the debt ceiling "jaw-dropping," and insisted in an interview Tuesday on CNBC that spending cuts would have to be part of any discussion to raise the nation's borrowing limit.

"Any time the president comes to Congress and wants authorization to increase the debt burden on our children and grandchildren, that's a debate we should have," Sen. Ron Johnson told "Squawk Box."

The "fiscal cliff" deal avoided new year tax increases on all families making less than $450,000 and delayed automatic spending cuts, known as "the sequester," for two months. But the agreement — passed by the House and Senate and signed into law by President Barack Obama — did not address the debt ceiling.

"I don't see a grand bargain occurring here. I wish there was," Johnson, R-Wis., said. "I don't think this is going to be solved with a 90-yard 'Hail Mary' pass. I think this is going to be a 'ground game.'"

But there's new urgency on a decision to raise the debt ceiling. A new analysis released Monday by the Bipartisan Policy Center said that the government will be unable to meet all of its spending obligations as early as mid-February. The borrowing limit of $16.4 trillion was reached at the end of last year, and the Treasury Department has been taking "extraordinary measures" ever since to pay the bills.

(Read More: No More Mr. Nice Guy: Obama Ready for 2nd Term Battles)

The debt ceiling issue is muddying the budget discussions that need to happen to replace the postponed the sequester with more targeted spending cuts — a process that promises to pick up where the "cliff" deal left off, with Republicans demanding more spending cuts and the president calling for more revenue.

Ron Johnson
Matthew J. Belvedere | CNBC
Ron Johnson

Johnson said, "The American people need to understand what the problem is so they actually support the solutions, which aren't going to be fun, quite honestly," speaking of entitlement reform and steep budget cuts.

The senator brought cups with charts and graphs on them to the "Squawk Box" set for Tuesday's interview. He said he wanted to illustrate the government's budget and debt problems. The cups are made in Oshkosh, Wis., at a plant he ran before joining the Senate in the Republican midterm election rout of 2010.

By CNBC's Matthew J. Belvedere; Follow him on Twitter @Matt_SquawkCNBC