Written by David Boaz, executive vice president at the Cato Institute. It is cross-posted with permission from Cato @ Liberty.
News reports quote President Obama, in discussing the debt ceiling and the ongoing argument over tax and spending policy in his press conference yesterday, saying:
It turns out the American people agree with me.
Do they? It’s true that a majority of respondents told pollsters that they wanted to raise taxes on someone else. And Congress did that in the “fiscal cliff” legislation.
But what about the president’s insistence on a larger government and essentially no cuts in federal spending? The election day exit polls shed some light on those questions.
51 percent of voters polled said the government is doing too many things better left to businesses and individuals—8 points higher than in the 2008 election. Only 43 percent of voters said they believe government should be doing more.
49 percent said the 2010 health care law should be repealed, with only 44 percent of voters supporting it.
Senator Rand Paul has a new plan to prioritize government spending in order to stave off defaults and bring the country back towards solvency:
In a renewed attempt to force President Barack Obama’s hand on the debt limit, Kentucky Republican Sen. Rand Paul is pushing legislation that would ban federal spending on anything but interest payments on the national debt, Social Security checks, and military salaries.
Paul, who is traveling through Israel this week, told Business Insider here Thursday that he believes the GOP should take a more pro-active approach to the coming fight over raising the debt ceiling. Rather than march the country toward a government shutdown — and spook markets with possible default — Paul argued that Republicans should pass a bill that would force the government to prioritize payments to bondholders.
Earlier this week, as the Democratic National Convention was getting underway, the U.S. national debt hit $16 trillion. Politicians – particularly the Republicans – went crazy online posting on social networks about how we should resist the Democrats and their desire to run the debt up even higher.
As if Republicans in Washington are much different.
The irony, of course, is that so many of the Republicans screaming about the debt are big contributors to (and causes of) it. But while we should definitely be concerned about debt, focusing primarily on it as our problem opens the door for raising taxes. Our national debt isn’t our primary problem; it’s just a symptom of a much, much bigger problem: spending.
If we control spending, we control debt. For far too long, spending has been out of control, and the result is an out of control debt.
We have an annual deficit (because of excessive spending), and the fight in Washington is over a fraction of that deficit. Republicans push for huge deficits, but their huge deficits are slightly smaller than what the Democrats want.
Dan Mitchell recently asked the question, “Does the $16 trillion debt really matter?” That’s a great article from Dan, well worth your time for a thorough read. In short, yes, it does. But focusing on the debt as the disease isn’t the answer.
All of the Members of Congress that will serve on the so-called “Super Committee,” the group created as part of the debt deal between the White House and Congress to find $1.5 trillion in “deficit reduction” in the coming months, have been made public:
The top Republicans in the House and the Senate appointed six more lawmakers on Wednesday to the bipartisan committee that is supposed to recommend steps to reduce federal budget deficits by at least $1.5 trillion over 10 years.
Speaker John A. Boehner chose three senior Republican House members: Jeb Hensarling of Texas, and Dave Camp and Fred Upton, both of Michigan.
Mr. Hensarling, who is chairman of the House Republican Conference, will be co-chairman of the new panel, along with Senator Patty Murray, Democrat of Washington.
The Senate Republican leader, Mitch McConnell of Kentucky, chose Senators Jon Kyl of Arizona, Rob Portman of Ohio and Patrick J. Toomey of Pennsylvania for the 12-member panel.
As noted, Sen. Patty Murray (D-WA), who hasn’t been one to restrain spending, was named by Senate Majority Harry Reid. She will serve with Sens. John Kerry (D-MA) and Max Baucus (D-MT). House Minority Leader Nancy Pelosi named her picks today:
House Minority Leader Nancy Pelosi (D-Calif.) has selected Rep. Jim Clyburn (D-S.C.), Rep. Chris Van Hollen (D-Md.) and Rep. Xavier Becerra (D-Calif.) for the so-called “supercommittee” on Thursday.
The deal agreed to over the weekend by the White House and leaders from both parties to raise the debt ceiling and cut spending, or so they say, has cleared the Senate in a 74 to 26 vote. It will now head to President Barack Obama’s desk for his signature.
It cleared the House last night by a vote of 269 to 161.
With the August 2 deadline fast approaching, many people are getting more than a little anxious for some kind of deal on the debt ceiling. One of those is syndicated columnist Donna Brazile. In her column, she calls on Congress to “drop politics”. Unfortunately, like most any other person who calls for folks to drop politics, her motivations are political.
You see, any time anyone calls on the opposition group to drop politics, it’s really a call for that other side to shut up and do what the person wants. It’s no different than calls for bipartisanship. It doesn’t matter on political affiliation either, because both major parties do it pretty regularly.
However, if Brazile was serious about helping the nation, I would argue, then she would also beg for deep, deep spending cuts that exceed John Bohner and Harry Reid’s plans. She would be calling for a serious rollback on intrusive government and job hampering regulations that would, ultimately, lead to increased revenue for the federal government. She would call for a lot of things, but she isn’t.
Like so many others out there, Brazile is just wanting Republicans to shut up and do what she thinks they should be doing. Is she necessarily wrong? Well, that’s a topic for debate all on its own. I honestly don’t want to get into that one right now. But right or wrong doesn’t really matter, not for the purposes of this post as it applies to the debt ceiling.
If a deal hasn’t been reached by the time this is posted (the agreement reached by congressional leaders and the White House over the weekend is pending caucus approval), then tomorrow will be a day of infamy. According to public consensus, our credit rating will be downgraded, our borrowing rates will skyrocket, Social Security checks won’t go out, we’ll have to lay off millions of government workers (oh hyperbole), China will get mad, and our cost of living will sharply increase while the quality of living decreases dramatically. The sky will fall, the world economy will collapse, unemployment will make what we have now look like a cakewalk. It will be Disaster;.
Except it will be none of these things.
August 2nd, if a deal is not reached, will not spell the end of the world. Even if S&P and Moody’s try and downgrade the United States. Why? Three reasons: One, if the markets thought we were going to be screwed, they would have done it before. Second, the credit rating agencies are utterly superfluous and worthless when it come to US debt. Third, even if we hit the debt ceiling, Turbo Tax Geithner will be permitted to prioritize interest payments on the debt and send out Social Security checks, meaning we won’t have a default (and Grandma can still buy the ingredients for her damned fruitcake.)
Taken together, these three things illustrate a picture where August 2nd isn’t the end of the world, and that we should really slow down, take a deep breath, and then have a shot of whiskey. Preferably rye, but that’s just me.
Democratic Congressional Campaign Committee chair Debbie Wasserman Schultz recently claimed that GOP efforts to get what they want in the debt ceiling debate is akin to dictatorship in recent comments reported by Politico. I understand that tensions are high right now. The debt ceiling issue is dominating the political landscape right now and a lot of folks just want it over. I have little doubt that Wasserman Schultz is one of them. Unfortunately for her, she really needs to understand the difference between GOP efforts and dictatorship.
Her quote from Politico:
“This is not leadership. This is almost like dictatorship. I know they want to force the outcome that … their extremists would like to impose. But they are getting ready to spark panic and chaos, and they seem to be OK with that. And it’s just really disappointing, and potentially devastating.”
Please note the scare words, namely “dictatorship” and “extremists”. This is a usual tactic designed to paint your opponent as unreasonable, regardless of anything approaching a fact. Now, I’m not saying the GOP hasn’t be intransigent, because to an extent they have been. But dictatorship?
Here’s the definition of dictatorship, courtesy of dictionary.com.
The Senate voted 51-46, along strict party-lines Friday to kill the House Republicans “cut, cap and balance” legislation.
The measure would have cut spending by $111 billion in 2012, capped spending over the next decade and prohibited more borrowing until Congress passes a balanced-budget amendment to the Constitution.
President Obama had threatened to veto the bill, which was dead on arrival in the Senate.
Senate Majority Leader Harry Reid (D-Nev.) called the legislation “very, very bad” and said it was a waste of the upper chamber’s time.
During the debate on “cut, cap and balance,” Senate Minority Leader Mitch McConnell (R-Ky.) argued the GOP plan would solve the nation’s deficit crisis if Democrats would join Republicans in supporting it.
“This isn’t rocket science,” said McConnell. “We could solve this problem this morning if Democrats would…join us in backing this legislation that Republicans support.”
Supporters of the proposal have cited a CNN poll in recent days showing that voters support some parts of it, specifically the Balanced Budget Amendment (BBA). That’s not a surprise since BBA proposal are politically popular. However, the “Cut, Cap and Balance” proposal passed by the House only called for a BBA. It didn’t attain the 2/3 requirement to pass a constitutional amendment.
As August 2nd approaches, stipulated by Treasury Secretary and tax cheat Timothy Geithner as the date when the U.S. will reach its statutory debt limit, our illustrious president, Barack Obama, becomes more and more unhinged. From highly partisan, contemptuous and fact-challenged press conferences, to his angry and petulant exit from a meeting with Republicans on the issue, it is clear that Obama is feeling the pressure. This is compounded by the fact that the historically weak-willed Republicans seem shockingly willing to be proven vertebrates, and actually refuse to back down on principle (Senate Minority Leader Mitch McConnell’s recent suggestion to completely abdicate constitutional duty and give all power to the president notwithstanding).
From class warfare rhetoric about tax breaks for corporate jet owners (signed into law by Obama in the 2009 stimulus bill, and less than a rounding error on the federal budget) to fear mongering the elderly to think Social Security checks will not go out, nothing is beneath this integrity-challenged president in his quest for power. He tirelessly repeats his Marxist mantra of needing to get “millionaires and billionaires” to “pay their fair share” and be a part of the “shared sacrifice”, despite the fact that the top 1% of all income earners (a group starting at $380,354/year and including millions of small businesses that file taxes under personal returns…hardly millionaires and billionaires) paid 38% of total tax revenue, while the bottom 50% paid only 2.7%. The top 5% starts at $159,619 and accounts for 58.7% of taxes paid.