"[W]ith respect to future debt; would it not be wise and just for that nation to declare in the constitution they are forming that neither the legislature, nor the nation itself can validly contract more debt, than they may pay within their own age." --Thomas Jefferson
Government & Politics
Congress Is Still Stuck in Neutral on Debt
Five days and counting until the end of the world. At least that's what Democrats would have us believe with regard to the federal debt ceiling. "What we're trying to do is save the world from the Republican budget," declared House Minority Leader Nancy Pelosi (D-CA). "We're trying to save life on this planet as we know it today." Well, Pelosi and her tax-and-spend ilk "succeeded" for one more day when the House postponed a vote on Speaker John Boehner's plan of spending cuts and debt-ceiling increase Thursday night. But it was because Boehner (R-OH) couldn't get enough Republicans to go along with his plan that it faltered. Even if the plan had passed the House, though, all 53 Senate Democrats had promised to torpedo it in favor of Majority Leader Harry Reid's plan.
Boehner's plan, revised Wednesday to improve its score with the Congressional Budget Office, included projected cuts of $917 billion over 10 years with no tax increases. Most Republicans got in line behind their leader, hoping to win the battle by offering something to the Senate after the upper chamber defeated Cut, Cap and Balance. Others concluded that the dollar amount stretched over too many years was woefully insufficient, and insisted on passage of a balanced budget amendment. We happen to think both sides are right.
Republicans control just one-half of one branch of the government, and they have to start somewhere. Yet $22 billion in cuts this year in exchange for $900 billion more in debt this year is a sorry deal. Trying to sell it by saying that the $900 billion increase is conditional on $917 billion in cuts is just Washington math. Even with the deal, the federal debt would rise several trillion over 10 years, meaning the ceiling would need to be raised many more times, including again in 2012.
Reid (D-NV) also has a plan to counter those "radical, right-wing, Tea Party extremists": Raise the ceiling by $2.4 trillion now, in exchange for cutting $2.2 trillion over a decade. That likely would avoid having to address the issue again before next year's presidential election, which President Barack Obama and his fellow Democrats want to avoid at all costs. However, Reid's plan has more than its fair share of accounting gimmicks. For instance, half the "cuts" in his plan are the savings from ending the wars in Afghanistan and Iraq. As columnist Charles Krauthammer quipped, "I'm told there's an extra $10 billion in here of savings from not invading Normandy a second time."
For his part, Obama has been remarkably silent this week following his speech Monday night, which offered nothing new -- just blame for everyone but him. Perhaps his advisers have concluded that we're all tired of hearing him read from the teleprompter.
Meanwhile, House Minority Whip Steny Hoyer (D-MD) and Assistant Minority Leader Rep. James Clyburn (D-SC) are floating a "14th Amendment solution," which they say would allow Obama to raise the debt ceiling unilaterally. Section 4 of the 14th Amendment reads, "The validity of the public debt of the United States ... shall not be questioned." Only a leftist using the "living constitution" could construe such language to mean that the president can unilaterally incur more debt, a power still left to Congress. Fortunately, even Obama acknowledges that using the 14th Amendment isn't "a winning argument."
Besides, even if the nation passes Aug. 2 without a deal, there will still be money to pay the interest on the debt and other vital obligations. We're pretty sure that, despite Nancy Pelosi's dire warnings to the contrary, "life on this planet as we know it today" will continue even without bureaucracies such as the EPA or HUD. The nation managed for two centuries without either one.
Finally, the White House is prodding the three major credit rating agencies to back the Reid plan. It's not just the debt ceiling that could cause a credit downgrade, however. Our long-term trajectory is not sustainable, which is likely why Obama long ago gave up on his demand for a "clean" increase in the debt ceiling -- meaning no spending cuts whatsoever.
What remains to be seen in the coming days is whether Congress can pass a deal -- any deal -- to address the issue, however timidly. Indeed, after being stymied Thursday night, the House turned to the urgent matter of re-naming post offices. The tragedy of it all is that real solutions and fidelity to the Constitution seem far beyond the grasp of so many of our elected representatives.
Essential Liberty
"The national debt-ceiling law should be judged by what it actually does, not by how good an idea it seems to be. The one thing that the national debt-ceiling has never done is to put a ceiling on the rising national debt. Time and time again, for years on end, the national debt-ceiling has been raised whenever the national debt gets near whatever the current ceiling might be. Regardless of what it is supposed to do, what the national debt-ceiling actually does is enable any administration to get all the political benefits of runaway spending for the benefit of their favorite constituencies -- and then invite the opposition party to share the blame, by either raising the national debt ceiling, or by voting for unpopular cutbacks in spending or increases in taxes." --economist Thomas Sowell
On Cross-Examination
In arguing the debt ceiling issue on the Senate floor, Sen. John McCain (R-AZ) quoted a Wall Street Journal editorial -- specifically the part criticizing "tea-party Hobbits" for wanting too much. It was a reference to J.R.R. Tolkien's novel "The Lord of the Rings."
Sen. Rand Paul (R-KY) fired back, "I think in reading the books, the hobbits were the heroes. They overcame great obstacles, and I think I'd rather be a hobbit than a troll."
This Week's 'Alpha Jackass' Award
"To make matters worse, the recession meant that there was less money coming in, and it required us to spend even more." --Barack Obama in his prime time speech Monday
News From the Swamp: Democrats Love Reagan?
Among all the other shenanigans taking place in Washington, Democrats have now attempted to rewrite history and co-opt Ronald Reagan's legacy. In their fight to raise the debt ceiling, House Democrats released a television ad with selective clips of a 1982 Ronald Reagan radio address warning of the fiscal disaster that would come from a failure to raise the debt ceiling. Of course they neglected to mention that the 1983 ceiling was $3 trillion, a bit below the current $14.3 trillion. Democrats gleefully point out that Reagan agreed to raise taxes at the time. The tax hike rolled back some of Reagan's historic 1981 tax cut, and he regretted the decision for the rest of his presidency. Democrats reneged on their promise to cut $3 spent for every $1 raised, and instead used the tax revenue to increase spending. In other words, they lied. You won't see that in the ad, nor will you hear what Reagan said later in the same speech: "Every time Congress increases taxes, the deficit does not decrease, spending increases." Democrats would love history to repeat itself.
The debt has quintupled since the Reagan presidency, and since that time Democrats have constantly smeared his legacy. But now, even Obama quotes the former president in his attempt to push his ideological agenda of an all-encompassing federal government. We would rejoice if our friends on the Left had truly come to respect Reagan, but when such comments are weighed against the vitriolic words Obama has used against the GOP in recent weeks, it's more than apparent that Democrats are adulterating Reagan's record for their own political gain.
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