With $16 Trillion in Debt, Time for Reform: Graham

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What good is it to raise the debt ceiling if you don’t address why you have debt, Senator Lindsey Graham asked on CNBC’s “Squawk on the Street” on Tuesday.

“It's better for the country to have a political fight over how to resolve our debt than it is to raise the debt ceiling without addressing what got us into debt,” the Republican for South Carolina said.

Graham added that the potential chaos surrounding a debt ceiling debate is of secondary concern when the U.S. has $16 trillion in debt. “I’m not going to vote to raise the debt ceiling until we get an agreement on entitlement reform, tax code reform, and some handle on the discretionary spending that will be see positively by those who look to America for leadership,” Graham said.

On Tuesday, Moody’s Investors Service said the U.S. could lose its triple-A debt rating if budget negotiations next year do not produce policies that over time decrease the country’s debt. (Read More: Budget Talks to Determine US Credit Rating: Moody’s.)

Graham also expects to have more support in Congress for those who want to address the underlying fundamental causes of the country’s ballooning debts. “Anything short of that is just going to make our problems worse,” the senator added.

He also thinks a Simpson-Bowles type deal makes sense. “Republicans would generate new revenue not by raising taxes, but by limiting deductions and exemptions, and Democrats would agree to entitlement reform and we all agree to discretionary spending caps,” Graham said. “That's the magic formula.”