The Debt Ceiling as Fiscal-Cliff Football
Congressional Republicans may prove willing to postpone a looming battle over an increase in the nation’s debt ceiling as part of the negotiations over the so-called fiscal cliff – at least for a little bit.
House Speaker John Boehner (R-Ohio), who met with President Obama on Monday, has offered to avoid the give-and-take over raising the debt ceiling over the space of a year if the White House, in return, supports about $1 trillion in federal spending cuts.
The president, according to reports, responded by calling for a two-year moratorium.
It’s all part of the debate over ways to best address the growing national debt. Failure to develop a mutually acceptable plan between Congress and the administration by the end of the year will force tax hikes and automatic budget cuts – an unpalatable possibility since economists warn it could lead to another recession.
The federal government currently is about $50 billion from reaching the $16.4 trillion debt limit set in 2011 after a substantial amount of partisan wrangling. The cap on the nation’s borrowing authority is expected to be reached by the last week of December. The Treasury Department maintains it can apply temporary measures to keep the government moving. But if the ceiling isn’t raised by some time in February, the U.S. could default on its obligations for the first time in history.
Obama appears determined to take steps necessary to avoid the sort of partisan showdown that enveloped the most recent debt limit debate. Treasury Secretary Tim Geithner, who has called for the elimination of the debt ceiling, offered congressional Republicans an alternative idea in late November as part of the administration’s plan for dealing with the so-called fiscal cliff.
Under that White House proposal the debt limit would no longer require a positive congressional vote. Instead, the president would inform the House and Senate that a debt-ceiling increase is pending. Congress could opt to pass on taking any action, thus permitting the hike to go into effect, or vote against it. The president could veto any negative vote.
In a presentation to the Business Roundtable in Washington on Dec. 5, Obama criticized Republican plans to use the debt limit for leverage in budget negotiations, asserting it is “a bad strategy for America. It is a bad strategy for our businesses. And it is not a game that I will play.”
“Everybody here is concerned about uncertainty,” he said. “There’s no uncertainty like the prospect that the United States of America — the largest economy that holds the world’s reserve currency — potentially defaults on its debts, that we give up the basic notion that the United States stands behind its obligations.’’
Obama promised to “break that habit” of holding the debt limit hostage and taking the nation to the brink of default “before it starts.”
But Senate Republican Leader Mitch McConnell, of Kentucky, immediately rejected the administration’s offer, maintaining that Obama is “the last person who should have limitless borrowing power” given the president’s history of addressing the debt.
“By demanding the power to raise the debt limit whenever he wants by as much as he wants he showed what he’s really after is assuming unprecedented power to spend taxpayer dollars without any limit,” McConnell said. “This isn’t about getting a handle on deficits or debt for him. It’s about spending even more than he already is. Why else would he demand the power to raise the debt limit on his own?”
Retaining the debate over the debt limit is “the only way we ever cut spending around here,” McConnell said, vowing that the president’s plan is “not going to happen.”
This has all the elements of a good farce
The so called fiscal cliff is the biggest manufactured crisis in US history. The biggest heist in broad daylight.
Everything the Thug-in-Chief did, from the moment he took office, was to bring the U.S. to this point. And it worked like a charm.
Not only did he get re-elected but also knows he will get 4 more yrs to complete his economic devastation! And those who believe that this is not the plan have not been paying attention, nor do they understand what radical revolutionaries of the Marxist kind have in mind.
And a perfect storm is brewing too but not on the fiscal side. The Radical-in-Chief is using a slaughter of horrific proportions in Newtown to grab American’s guns. And it was his administration which stopped the funding of necessary school safety programs 2 times!
The point being, once the economy is destroyed it can be ‘reconstructed’ – ‘fairly’. And once the guns are collected Martial Law can be called at will – http://adinakutnicki.com/2012/08/07/barack-hussein-obamas-deconstruction-plans-green-wise-via-the-economy-disarming-the-citizens-via-gun-control-connecting-the-dots-addendum-to-the-second-term-plans-of-an-obama-presidency-c/
IF only this was conspiracy ranting…..
Like I keep saying. All they need to do, now, is to declare a ‘national emergency’ and it’s all over. Economic ‘collapse’? Natural disaster? A big riot, somewhere? Any reason will do. Any reason at all. We’re that close to open tyranny.
Realistically, all that Boehner and the House have to fight with, politically, is a wet noodle.
Obama appears determined to take steps necessary to avoid the sort of partisan showdown that enveloped the most recent debt limit debate.
And what planet are you on, sir?
It’s got to be at least as far out as Uranus.
Obama wants to be not just King, Emperor, but Pharaoh, Fuhrer.
Exactly. And has millions of true believers behind him who think he’s the messiah instead.
Our money is our freedom.
That pack of jackals dancing the Potomac Two-Step are only apologetically trying to sneak the same end game goal past us. They may as well burn the constitution and cry alligator tears. “You elected us to put you in chains (of debt) to protect you. And, we can form a more perfect union by redistributing the wealth. Obey the collective.”
The second this happens, Articles of Impeachment followed by conviction in the Senate.
The groundswell demanding this will easily clear the 2/3rds bar in the Senate…if he and Biden are not forced out of office long before the trial gets underway.
He will never dare.
Maybe. In fact probably likely, but with Biden, Reid and now Warren, Obama supporters in the Senate could browbeat the rest of their party in line.
The open question is the propaganda arm (i.e. private media companies): would they cheer this or is this a line too far?
“He will never dare.”
Never ever under estimate the “balls” of an idiot when in power.
The House can vote anything it likes. Harry Reid is under no obligation to bring a House bill to a vote in the Senate.
He will if the consequence of not doing so is a government shutdown. The Republican lead House could tell him, “Either you bring this up for a vote and vote the right way, or no more appropriations bills get passed for the rest of the term.”
Obama noting Congress’ responsibility to “pay our bills” is rich…if Obama lived up to his responsibility and proposed a budget – and a balanced budget at that – then maybe he can justify a wee bit of his insulting and arrogant commentary.
Otherwise keep that redistributionist pie-hole shut.
I just don’t understand why reaching the debt limit would mean defaulting on our debt. When I max out my credit card, I don’t default, I pay the bill and cut spending elsewhere in the budget. Is there something in the law that prevents them doing it this way? Or am I missing something else?
Give me 15 minutes and I’ll find enough cuts to make the payment without cutting social security, food stamps or defense.
I’d start with congressional & white house travel, then the EPA, the NEA, the Dept of Ed, Homeland security, TSA, foreign aid to people that hate us. Then go from there if I still need enough to make the payment.
Then I’d start working on the next payment due.
Maybe we need to send Congress to a Dave Ramsey seminar.
The Impoundment Control Act authorizes the President to unilaterally delay spending for 45 days without Congressional approval, subject to Constitutionally-mandated spending. After that, cutting spending would require the consent of Congress, however, I am convinced that any attempt to use the Impoundment Control Act to justify borrowing in excess of the debt limit would be held unconstitutional and void, such that the ICA is unenforceable to the extent that obeying it would require collecting taxes or borrowing monies that Congress has not authorized.
It’s the Chinese who will decide if it’s “constitutional” or not.
Yours are, in my opinion, the most knowledgeable and intelligent comments on this blog. I want to respectfully ask if it is not probable that the Court is in the pocket of B Hussein O and ready to rubberstamp anything he chooses to do? Do we have five honest souls on the Court? Or, maybe about 3 and one half?
Whatever the Thing is that is currently masquerading as POTUS, we need to arrest it,examine it, commit it to an appropriate institution and repudiate its each and every act since election in 2008. The commitment should be permanent and irrevocable. This monster is the product of frankensteinian electorate which requires immediate reconstruction in line with the Founders original product.
I’m sorry, have you LOOKED at our budget?
Bill Whittle, a PJTV reporter(?.. pundit, w/e its called.. commentator) did a nice video on this awhile back, its called “The vote pump” you should watch it on youtube, fairly informative.
But heres a quick break down for you. You could basically cut payroll tax completely, get rid of it, and keep the rest of our taxes as they are across the board as long as you cut all spending that is related to entitlements, and we could run the government and still have just a tad extra to start paying down the debt. No need to increase taxes, infact we all get a tax break because no more payroll taxes.
On the other hand, you could cut 100% of government spending, EPA, NASA, cut funding for every single program and agency, cut every single congressmens salary and stop paying for the power to their buildings… do ALL of that, and you STILL wouldn’t have enough in tax revenue to pay all the entitlement spending, you’d STILL have to borrow in excess of what we get in tax revenue. you’d have to jack taxes up still, and even then you’d only barely break even.
So yeah, cutting government “bit by bit?” Not going to solve jack. You could cut 100% of it, cut it all out even all military spending, and you’d still currently be running a deficit just off entitlement programs.
I’m sorry but the solution is a bit more complicated.. and it involves letting the payroll tax cuts expire, VASTLY drawing back on medicare/medicade spending OR tripling the tax % on them (currently 1.45% of your paycheck goes there, it’d need to go up to nearly 6% on everyone, even the business side contribution, just to cover that hog of a program), scaling back the military a bit (its still the governments job to protect us and our interest you know), and cutting all other spending. Food stamps? Yeah sorry, no, figure out how to live on cat food at this point, to many people abused and misused it so it has to go, blame them, not us. Then we can get the government to a balanced budget, and after that hopefully one day the economy will pick back up on its own and we’ll start being able to pay down the debt.
“You could cut 100% of it, cut it all out even all military spending, and you’d still currently be running a deficit just off entitlement programs.”
I’m not sure that is correct!
Estimated FY 2013 revenue is set at $2.9 trillion. Entitlement spending is slightly more than 50% according to the conservative Hertiage Foundation data. Of that 50% + entitlement spending social security is ‘funded’ for years out. While I don’t have 2012 data in hand at the moment, in 2010 the total HHS depaertment expenditure was $890B including medicare and medicaid. The total expenditure for the social security administration was $780B including social security benefits. That totals slightly over $1.6T.
I certainly understand and agree with the premise of your commenting though. Entitlements are growing out of control especially in these times of a horrible economy and high unemployment for which there seems to be no immediate cure for.
“I just don’t understand why reaching the debt limit would mean defaulting on our debt.”
Walt
Heres what happens as it was explained to me years ago.
Using the congressional authority of the Second Liberty Bond Act of 1917, congress approving the increase of the debt ceiling authroizes the Treasury to print and offer the sales of bonds to the people and foreign governments to cover the increased debt. In other words, authorizing the Treasury to borrow monies with interest, to run the government.
If somebody has a better or more correct explanation please offer it.
translate: “i spend, you pay.”
No-one in Washington is serious about getting the spending under control and why should they?
The can WILL be kicked until it slams up against the wall, that’s the ONLY change on the table…
The politicians know what needs to be done. They just can’t figure out how to get reelected after they do it. Their total motivation is maintaining their jobs and power. Actual responsible governance doesn’t much motivate them. The debris field that they have created proves this hypothesis.
“The administration wants Congress’ power of the purse …”
This is like watching a re-run of English history. His Majesty dispatching nabobs to suck up to (or intimidate) Commons. All the while, gnashing his teeth at the very idea of even having to acknowledge the existence of the Unwashed.
Someone needs to photoshop Obama with a perfumed lace hanky up his left-hand coat sleeve.
Everybody relax. Boehner is the right man for the times, and has everything under control. We are in good hands.
Somewhere and at some time in the past, I thought I learned that the Constitution was a check on overpowering government, be it federal or state – that citizens were empowered with certain inalienable rights. But I am amazed that as time goes on, the denizens of Capitol Hill and the White House find new, never before discovered, governmental privileges and powers tucked away in various corners of that august document. And that in compensation, new restrictions on the rights of the citizenry are found buried in the concrete language of those honed and honest statements of the master craftsmen of the Constitution.
I fear, like so many constitutions of other nations, our Constitution is fast becoming nothing but a scrap of yellow parchment – on display, but not practiced in good faith.
This article belongs at Politico. Mr. Straub, I suggest you do some critical thinking before writing and repeating progressive propaganda without irony. The last debt crisis Mr. Boehner agreed to saving 7 Billion out of the last budget and within 3 days the president was requesting another 30 billion for unemployment compensation. The plan is obvious, let us go over the fiscal cliff, wait a while, threaten closing down of the government and then Obama comes riding to the rescue with an “Obama Middle Class Taxcut”. Boehner needs his leadership position taken away or the Republicans are dead meat in 2014 and it may be the end of the party and the country. We didn’t elect Boehner to be 1/3 of the government, we elected a Republican congress.
Today, the Second Liberty Bond Act of 1917 could probably be ably challenged though left to stand by the court. Reenforcing the 1917 Act is the 1939 Congressionally passed legislation to create the first total debt limit followed by the more recent 1985, Congressional attachment called Balanced Budget and Deficit Control Act, better known as the Gramm-Rudman-Hollings Act.
Taken in its totality, I fail to see how the Obama administrations sees some legal standing to circumvent congressional authority. What am I missing?
That said, for several years, the House of Representatives had a ‘rule’ that said it had passed a debt limit increase simply by passing the annual budget. This allowed House members to say they had not voted to increase the debt. However, the House abolished that rule in 2011.
So now, we’re back to my original comment. In these times the budget and debt can be controlled by political ideology of either controlling party over that of sound fiscal management and controls.
What a corrupted political and economic mess our congress and executive branch has created over so many decades!