While Congress prepares its budget for this year, threatening deep cuts to a $14 trillion debt, the first real test of the GOP’s fiscal constitution is shaping up to come in the form of whether to raise the debt ceiling.
Years ago, no one wanted to talk about expanding the credit line of the U.S. government. It was such a stark reminder of how bad a hole we were in that both parties built the significant vote as a procedural move with other votes. In other words, they tried to bury the thing in hopes members would not have to rise in defense of an ever-growing nightmare.
What profiles in courage — both parties were part of the Ostrich Caucus — sticking their collective heads in the sand on some of the most important issues of the day.
And now here we are again: Republicans are at the helm, and Treasury Secretary Timothy F. Geithner and his minions are screaming like Chicken Little that if their opponents don’t “do the right thing,” then the U.S. will default on its debt obligations.
Keep in mind that this story barely made a ripple back in February 2010 — the last time the nation’s debt ceiling was to be raised. President Obama couldn’t be bothered with such distractions, and the White House was all too eager to revert to rule No. 1 of its administration: Blame George W. Bush.
Now that Republicans control the House, Democrats are eager to see what degree of hypocrisy they’ll commit on raising the debt ceiling.
It just kills me that the party not in power is so eager to hug the bible of fiscal discipline. Take Mr. Geithner’s comments this month: “Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses and could lead to the loss of millions of American jobs.”
Pretty scary, huh? The funny thing is this line could have been written decades ago when Democrats took us down this path, or even more recently when Mr. Bush and Mr. Obama piled on to the deficits.
There’s no sense in assigning blame because each side will wag its finger at the other for eternity. The question now for House Republicans is: Will you blink first?
Will House Speaker John A. Boehner and the scores of members who were voted in on the fiscal discipline mantle allow this golden opportunity to slip them by?
I agree: No one wants to default on our debts. But folks, we’re in default now. Simply raising the credit limit on your Visa credit card doesn’t keep you solvent. It just means you’ll have a more difficult time repaying such debts.
The consensus coming out of the GOP is that it will have to agree to raise the debt ceiling, but only by a smaller increment and accompanied by the Democrats and administration of corresponding spending cuts. In other words, use the vote as leverage to pass cuts such as the $2.5 trillion the GOP proposed the other week.
Others, like Rep. Michele Bachman, Minnesota Republican, and Sen. Rand Paul, Kentucky Republican, are steadfast in their refusal to give the Fed any more debt leeway. This begs the question of what, in fact, would happen if we don’t raise the ceiling. Contrary to popular belief, the government won’t suddenly go into default once the debt ceiling is reached. The fact of the matter is that there is enough cash coming in to pay its commitments for the next several months.
The government would not actually default unless Congress and the president refuse to agree on passage of a law requiring the Treasury to concentrate our spending and prioritize paying the interest and principle of our debt.