The debt ceiling debate is at its boiling point even after the bill to increase the debt ceiling had been passed and necessary steps had been taken. This is majorly because it is the foremost projected issue in the electoral campaign of 2012 elections for both the Republican and the Democrats. The senators from Hawaii, Daniel Inouye and Daniel Akaka have both voted in favor of raising the debt ceiling during the last voting conducted for raising the debt limit before 2nd August 2011, which was the deadline set by the US Treasury. According to President Barack Obama, the emergency bill that the Congress had passed was to prevent a default on the debts incurred by the government and the first in a series of steps to ensure that the country lives within its means. Senator Inouye was quoted saying that his action was necessary at this point of economic crisis in the country.

Inouye was also quoted saying that the $2.1 trillion cut over the next 10 years will have a very deep and significant effect on the government services. The proposal that has been passed contains no new sources of revenue. The senior senator from Hawaii was also seen to be quite displeased with the Republicans. He said that they were negotiating with such people who would rather observe the country defaulting before they backed off on their campaign promises. Not raising the debt ceiling would mean that the US would convey to the world at large that they were not meeting their financial obligations. This would in turn affect not only the markets of the country but around the whole world.

However, it is to be kept in mind that the decision to raise the federal debt ceiling comes at a cost. The compromise involved to raise the debt ceiling is likely to inflict considerable amount of fiscal pain on many states, including Hawaii, which are struggling to come out of the effects of recession. The federal stimulus spending will now be cut off to a large amount. The agreement that that President Barack Obama and Republicans came to in order to avoid the first financial default by raising the debt ceiling, required a slashing of $2 trillion from the spending plans of the federal government over the next decade. The enactment of this agreement will mean that level of domestic spending will be the lowest since President Dwight Eisenhower more than half a century ago.

The details of the spending cuts of the states were undisclosed and the criteria on which the spending cuts will be implemented were also unclear. However, the lawmakers from both the parties have come to a common consensus that the requirement for cutting or imposing caps on discretionary spending over the next decade was important. This signifies quite a wide ranging cut including cuts in the aid to states provided by the federal government which includes Head Start school readiness program, Meals on Wheels and worker training initiatives, funding for transit agencies and education grants for disabled children.

The governors, state lawmakers and state agency heads were quite concerned that the Congress was likely to make deep reductions or cuts that would change the amount of federal aid towards health services for the economically deficient most notably through Medicaid. This can shift more of the costs on the shoulder of the states which are already facing troubles balancing their own budgets. Hawaii is no exception to this. Thus Hawaii will suffer along with other states for this situation that US is facing .