Archive for the ‘Debt Ceiling’ Category
Wednesday, January 16th, 2013
Rivkin and Casey: The Myth of Government
Default
The Constitution commands that public debts be repaid. There is no such obligation to fund entitlement programs.
EXCERPT FROM THIS ARTICLE: …..since the federal government’s roughly $200 billion in tax revenue per month is more than sufficient to service existing debts. If the executive chose to act irresponsibly and unconstitutionally and failed to make any debt payments when they come due, debt-holders would be able to go to the Court of Federal Claims and promptly obtain a money judgment.
Three false arguments, pushed hard by the Obama administration and accepted on faith by the media and much of the political establishment, must be laid to rest if the American people are to understand the issues at stake in the federal “debt ceiling” debate.
The first is that Congress’s failure to raise the debt ceiling—the amount of money the federal government is authorized to borrow at any given time—will cause a default on the national debt. The second is that federal entitlement programs are constitutionally protected from spending cuts. The third is that the president can raise the debt ceiling on his own authority.
To take up the first canard: Contrary to White House claims, Congress’s refusal to permit new borrowing by raising the debt ceiling limit will not trigger a default on America’s outstanding public debt, with calamitous consequences for our credit rating and the world’s financial system. Section 4 of the 14th Amendment provides that “the validity of the public debt of the United States, authorized by law . . . shall not be questioned”; this prevents Congress from repudiating the federal government’s lawfully incurred debts.
The original concern of this provision was to guarantee the integrity of federal debts incurred during and immediately after the Civil War (while the debts of the Confederacy were nullified permanently), and to ensure that a newly “reconstructed” Congress—to which the Southern states were readmitted—would not reverse these decisions. However, the amendment’s language was not limited to the Civil War-related debts. In Perry v. United States (1935), the Supreme Court made clear that the provision “indicates a broader connotation” protecting the nation’s debts as a whole.
This means that a failure to raise the debt ceiling—to prevent new borrowing—does not and cannot put America’s current creditors at risk. So long as this government exists, and barring a further constitutional amendment, those creditors must be paid. (more…)
Posted in Bankruptcy, BUDGET FOR 2013, Congress, Debt Ceiling, Obama, Obama Administraiton and Policy, Spending, Taxation, Taxes | No Comments »
Tuesday, January 8th, 2013
The Education of John Boehner
Leverage for the next clash: GOP willingness to let the spending sequester take effect.
What stunned House Speaker John Boehner more than anything else during his prolonged closed-door budget negotiations with Barack Obama was this revelation: “At one point several weeks ago,” Mr. Boehner says, “the president said to me, ‘We don’t have a spending problem.’ ”
I am talking to Mr. Boehner in his office on the second floor of the Capitol, 72 hours after the historic House vote to take America off the so-called fiscal cliff by making permanent the Bush tax cuts on most Americans, but also to raise taxes on high earners. In the interim, Mr. Boehner had been elected to serve his second term as speaker of the House. Throughout our hourlong conversation, as is his custom, he takes long drags on one cigarette after another.
Mr. Boehner looks battle weary from five weeks of grappling with the White House. He’s frustrated that the final deal failed to make progress toward his primary goal of “making a down payment on solving the debt crisis and setting a path to get real entitlement reform.” At one point he grimly says: “I need this job like I need a hole in the head.”
The president’s insistence that Washington doesn’t have a spending problem, Mr. Boehner says, is predicated on the belief that massive federal deficits stem from what Mr. Obama called “a health-care problem.” Mr. Boehner says that after he recovered from his astonishment—”They blame all of the fiscal woes on our health-care system”—he replied: “Clearly we have a health-care problem, which is about to get worse with ObamaCare. But, Mr. President, we have a very serious spending problem.” He repeated this message so often, he says, that toward the end of the negotiations, the president became irritated and said: “I’m getting tired of hearing you say that.”
With the two sides so far from agreeing even on the nature of the country’s fiscal challenge, making progress on how to address it was difficult. Mr. Boehner became so agitated with the lack of progress that he cursed at Senate Majority Leader Harry Reid. “Those days after Christmas,” he explains, “I was in Ohio, and Harry’s on the Senate floor calling me a dictator and all kinds of nasty things. You know, I don’t lose my temper. I never do. But I was shocked at what Harry was saying about me. I came back to town. Saw Harry at the White House. And that was when that was said,” he says, referring to a pointed “go [blank] yourself” addressed to Mr. Reid.
Mr. Boehner confirms that at one critical juncture he asked Mr. Obama, after conceding on $800 billion in new taxes, “What am I getting?” and the president replied: “You don’t get anything for it. I’m taking that anyway.”
(more…)
Posted in Big Government, Congress, Debt Ceiling, GOP, Obama, Obama Administraiton and Policy, Politics, Progressive Movement, Redistribution of Wealth, Spending | No Comments »
Saturday, January 5th, 2013
Strassel: The Debt-Ceiling Fight Will Be
Dirty
The GOP thinks it will win, but the party’s strategy is far from clear.
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By KIMBERLEY A. STRASSEL
- EXCERPT FROM THIS ARTICLE: Question three: What other hostages are Republicans willing to see shot? Knowing he has lost his tax trump card, Mr. Obama seamlessly moved on this week to the defense budget. The cliff deal turns off the automatic sequester cuts to the military for only two months, and Mr. Obama intends to make further tax hikes the price for anything longer.
Are the GOP’s defense hawks willing to stomach those cuts as a price for entitlement reform? Having publicly campaigned against this slashing of the military, can the party stare down the president with a unified position? Mr. Obama is betting they can’t, which is precisely why he ensured in the cliff deal that the sequester kicks in at the very time of the debt-ceiling fight.
In the classic movie “The Untouchables,” the street-smart cop Jim Malone explains to his golden-boy partner Eliot Ness that things will have to get dirty if they intend to bring down Al Capone: “You see what I’m saying is, what are you prepared to do?” That’s the question for the GOP as it sifts through the ashes of this week’s cliff deal.
The tax-hike extravaganza that President Obama signed on Wednesday was Round One of a bigger deficit fight, and the GOP was battered badly. Poor messaging, an internal tax feud, and a miscalculation of the president’s tactics—all combined to land the private economy with a monstrous tax bill, and the Republican Party with a black eye.
On to Round Two, which will center on the debt ceiling due to hit in February. Republicans are convinced they can win this one. Their thinking? The president can’t use the threat of higher middle-class taxes to force the GOP to yield. Without the middle class as a hostage in the negotiations, they believe, the debt-ceiling debate will be entirely on spending and Mr. Obama’s failure to confront the nation’s $16 trillion debt.
Associated PressSpeaker of the House John Boehner, right, and House Majority Leader Eric Cantor, left, at the Capitol in Washington on Tuesday. (more…)
Posted in Big Government, Congress, Conservatism, Debt Ceiling, Democrats, Dept of Defense, Entitlements, GOP, Liberalism, Obama, Spending, Taxation, Taxes | No Comments »
Wednesday, January 2nd, 2013
The Real Cliff
The staggering debt from decades of continuous government borrowing is about to come due
Christopher DeMuth
Christopher DeMuth is a distinguished fellow at the Hudson Institute.
December 24, 2012, Vol. 18, No. 15
EXCERPT FROM THIS ARTICLE: Ronald Reagan and Jack Kemp were authentic supply-siders, but they and other Republicans understood that tax cutting could serve an electoral purpose as well: In response to the big-spending Democrats, the GOP could turn the tables and offer lower taxes rather than purse-lipped fiscal restraint. Then, a few years into Reagan’s first term, another purpose appeared. The administration had been much more successful in cutting taxes than cutting spending; while the economy was recovering smartly, deficits and debt were growing steeply. What were limited-government conservatives to do?
It is important to understand that the fiscal cliff is a charade. There are, to be sure, many conscientious debt reformers working to avert our proclaimed year-end epic fall—along with many cynics who are using the occasion to advance pet projects that will make the debt problem worse. But all concerned are working within a fiscal system that has become seriously pathological. The cliff is the latest expression of that pathology.Just last year, the president and Congress agreed by statute to (a) increase the federal government’s public debt by more than $2 trillion (up to $16.4 trillion) and (b) begin reducing annual federal spending by less than one-tenth that amount starting in 2013. A variety of temporary tax reductions, aimed at spurring recovery from the Great Recession, were also scheduled to expire in 2013. Now that the new debt has been borrowed and spent, the prospect of actually reducing our annual $1 trillion deficits by a significant amount is regarded by all sensible people as a catastrophe that must be avoided at all costs.
And what is to be done to stop the spending cuts and tax increases? This month’s partisan positioning over raising taxes on the wealthy masks a consensus, embraced by the leadership of both parties, on two essential principles of cliff-avoidance. First, the vast majority of Americans who are middle class must be spared any clear-and-present impositions: Their direct income taxes must not be increased, and their Social Security and Medicare benefits must not be reduced any time soon—meaning that any reductions will be as contingent, and possibly ephemeral, as last year’s debt-reduction accord. Second, the federal debt must be immediately increased by yet another $2-3 trillion, with further increases of equal magnitude certain to follow.
These principles embody America’s de facto fiscal policy since the early 1960s: continuous government borrowing to pay for current consumption. That policy was, in the first instance, an unintended consequence of Keynesianism, which proposed that government shore up aggregate demand by spending more than it taxed during economic downturns. (more…)
Posted in American History, Banking, Big Government, Debt Ceiling, Democrats, Economy, George W. Bush, Keynesian Theory of Economics, Obama, Obama Administraiton and Policy, President Ronald Reagan, Spending | No Comments »
Tuesday, December 4th, 2012
BREITBART.COM
Obama’s Arrogant Overreach—and
the Republican Opportunity
In the “fiscal cliff” negotiations, the Republicans are in desperate need of a game-changer. That is, the current dynamics in Washington DC are so bad right now for Republicans that they are likely to go off a political cliff. President Obama and the Democrats have always been looking to push the GOP into the abyss, of course, but lately, Republicans have volunteered to stand at the edge of the precipice and lean far over.
And yet amazingly, in the meantime, just last week, Republicans were handed a possible game-changer—and they did nothing with it. They just ignored it, so the Democrats will keep pushing. If the GOP doesn’t get a clue as to the real nature of the fiscal cliff negotiations, they will lose.
In a nutshell, Republicans need to understand that the real struggle is not with the Obama administration; instead, the real struggle is for American political opinion, including the broad middle that preferred Obama to Romney, but nevertheless feels no great trust or affection for the re-elected 44th President.
If Obama is seen as a fellow who wants to move the economy to a better place by raising taxes on the Koch Brothers, he will win. But if Obama is seen as an arrogant and unconstitutional power-grabber, he will lose. By that logic, then, Republicans should shift their perceived focus, from defending the low tax rates of billionaires to defending the US Constitution against executive Caesarism.
On Thursday, November 28, amidst delicate negotiations over the “fiscal cliff” on Capitol Hill, Treasury Secretary Tim Geithner presented Senate Minority Leader Mitch McConnell and House Speaker John Boehner with a radical proposal: the Legislative Branch should cede over to the Executive Branch the power to raise the debt ceiling by executive fiat. If this cession of fiscal authority were ever to happen—if Congress were to lose its right to vote “yea” or “nay” on debt-limit increases—that would be an epochal political power shift. It would mean that for the first time in US history, the President would have complete dominance on spending issues. And that’s a kind of dominance that no president should be trusted with, let alone Obama. (more…)
Posted in Andrew Breitbart, Big Government, Congress, Conservatism, Debt Ceiling, Democrats, Entitlements, GOP, Obama, Obama Administraiton and Policy, Politics, Progressive Movement | No Comments »
Thursday, September 13th, 2012
Posted in Bankruptcy, Big Government, Conservatism, Debt Ceiling, Democrats, Economy, Election 2012, GOP, Government Waste and Fraud, Musical Videos, Obama, Obama Administraiton and Policy, Politics, Progressive Movement, Spending, Videos | No Comments »
Monday, March 26th, 2012
Posted in American History, Bankruptcy, Big Government, Budget for 2012, BUDGET FOR 2013, Debt Ceiling, Entitlements, Federal Reserve, History, Interest Rates, National Defense, Obama Administraiton and Policy, Spending, Videos | No Comments »
Friday, February 24th, 2012
Posted in Bankruptcy, Budget for 2012, BUDGET FOR 2013, Debt Ceiling, Entitlements, Liberalism, Obama Administraiton and Policy, Spending, Videos | No Comments »
Friday, February 17th, 2012
To infinity and beyond! This is the debt chart Obama and Geithner should be ashamed of
By James Pethokoukis
February 16, 2012,
Testifying before the House Budget Committee today, U.S. Treasury Secretary Tim Geithner told Chairman Paul Ryan the following: “We’re not coming before you to say we have a definitive solution to that long-term problem. What we do know is we don’t like yours.”
Actually, President Obama sort of did have a definitive solution. He created a debt commission, which devised a long-term debt reduction plan. Which the president rejected. And instead, we get this new budget proposal, which makes no effort to deal with Medicare, Medicaid, and Social Security — the long-term drivers of U.S. federal debt. The debt curve never gets bent, as the above White House (!) chart shows. It just goes up and up and up — until the heat death of the universe or the economy is struck by a Greek-style debt crisis.
Here’s what the bipartisan Committee for a Responsible Federal Budget says about the president’s plan:
Over the long-term, the President’s budget would not constrain rising debt, as retirement and health care costs continue growing faster than the economy. According to the Administration’s own estimates, debt would grow as a share of the economy past 2022 exceeding 93 percent by 2035 and nearly 125 percent by 2050. These levels would be both economically constraining and ultimately unsustainable. (more…)
Posted in Big Government, BUDGET FOR 2013, Congress, Debt Ceiling, Democrats, Economy, Entitlements, Government Waste and Fraud, Medicare/Medicaid, Obama, Obama Administraiton and Policy, Obamacare, Spending | No Comments »
Sunday, January 22nd, 2012
Posted in Big Government, Conservatism, Debt Ceiling, Economy, Education, Election 2012, Entitlements, Liberalism, Obama, Obama Administraiton and Policy, Obamacare, Socialism, Spending, Videos | No Comments »
