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« on: February 10, 2011, 04:29:26 PM » |
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The Patriot Post - The Debt Bomb Showdown
From The Federalist Patriot
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The Debt Bomb Showdown
By Mark Alexander · Thursday, February 10, 2011
112th Congress vs. Obama's Error of Big Government
"We must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude." Thomas Jefferson
There's currently a lot of talk about deficits and debt among the new House Republican majority; much of it is contentious intraparty debate about whether to raise the "debt ceiling."
For the purpose of clarity, let me reiterate a few definitions.
The national budget deficit is the difference between the total spending budget (including interest on debt) authorized by Congress for each year, and total tax receipts. For this fiscal year alone (October 1, 2010, to September 30, 2011), the shortfall is projected to be 1.15 trillion dollars.
The national debt is the total of all outstanding U.S. Treasury obligations held by domestic and foreign individuals, institutions and governments, and is currently 14.05 trillion dollars.
The debt ceiling is the self-imposed limit Congress sets for what it can legally borrow to pay for all the government services that it can't afford. A year ago, Congress increased that limit to 14.29 trillion dollars. But since Congress has authorized spending almost five billion dollars a day more than it takes in, that debt ceiling will be hit sometime between the end of March and mid-May.
Complicating matters further, the then-Democrat-controlled Congress failed to set a new budget for the current year, instead opting for continuing resolutions (CR) that authorize the prior year's spending levels. They utilized this budget ruse in order to avoid greater accountability (greater losses) in the midterm election last year. The current CR expires on 4 March, and House Republicans are using that expiration date to force Barack Hussein Obama into budget-cutting submission.
Here is how the key Republican players in this crisis -- and it is a crisis -- have positioned themselves on the issue of deficits and the debt ceiling.
House Speaker John Boehner notes, "We have to work our will in the House. We have to work with our colleagues in the Senate and put something on the president's desk. If the president is going to ask us to increase the debt limit, then he's going to have to be willing to cut up the credit cards. ... [Default] would be a financial disaster not only for our country, but for the worldwide economy. Remember, the American people on Election Day said we want to cut spending and we want to create jobs. You can't create jobs if you default on the federal debt."
Rep. Austin Scott (R-GA), president of the powerful freshman class of the 112th Congress, adds, "If there is a vote put forward to increase the national debt ceiling and that is all the legislation does, I think it will fail overwhelmingly."
Budget Committee Chairman Paul Ryan (R-WI) is advancing a budget plan with $32 billion in spending cuts for the current budget year (FY11), well short of the Republican Pledge to America's "$100 billion in the first year alone."
But House Majority Leader Eric Cantor (R-VA) explains, "It fulfills the pledge because we said in a year's time we were going to cut spending by $100 billion. As you know, we are five-twelfths of the way through the fiscal year by the time the expiration occurs. We will be proposing this again in the next fiscal year, and if you look at it on an annualized basis, I assure you it will be over $100 billion."
It better be!
Rep. Cantor adds, "We are simply not going to accept an increase in the debt limit without serious cuts and reforms. ... What we need to do and are committed to doing is making sure that we achieve spending cuts and effect real reforms so that the spending binge ends. We look at the debt limit vote as an opportunity for us to accomplish those goals."
In the Senate, Tea Party favorite Jim DeMint (R-SC) says that Obama administration claims that holding the debt ceiling at current levels would be "catastrophic" are true only if the administration elects to default on interest and debt obligations.
His Senate colleague Pat Toomey (R-PA) has proposed the Full Faith and Credit Act, which would "require the Treasury to make interest payments on our debt its first priority in the event that the debt ceiling is not raised." However, Toomey is not prepared to hold the debt ceiling, noting, "Congress should make increasing our debt contingent on immediate cuts in spending and effective reforms of the spending process that helped get us into this mess. We can do so without jeopardizing the full faith and credit of our country -- and we should."
Sen. Rand Paul (R-KY), who along with DeMint is a member of that body's Tea Party Caucus, has proposed a much more aggressive plan, which cuts $500 billion from the federal budget this year alone. This plan is something of a straw-man target, especially its proposed cuts to defense spending at a time when that budget has been trimmed to limits that increase threats to our frontline warriors.
However, the other domestic spending cuts in Paul's budget should not be discounted, as those cuts have the overwhelming support of the aforementioned Tea Party1, a formidable movement that continues to pick up steam across the nation. |
