Rates aren't higher. It is still a deflation (overall debt growth is running half normal rates, the government is just the only sector expanding). Demand for dollars in safer forms is through the roof, on general risk aversion everywhere. Every financial institution on the planet is simultaneously attempting to reduce their credit risk, and between lending to deadbeat real estate speculators on mainstreet and the US treasury, they'll pick the US treasury.
We can readily adjust to all of this, but we should not be passing new trillion dollar spending items, we should be repealing ones already on the books, or modifying their terms to save those amounts gradually.