The Phony Debt Ceiling Debate

Submitted by Mike Appleton, Guest Blogger

Humorist Tom Bodett observed on NPR’s “Wait, Wait…Don’t Tell Me” this weekend that if we raise the debt ceiling any higher, we won’t be able to paint it.  In addition to being funny, his comment was more intelligent than most of what passes for debate on the issue.

Raising the debt ceiling is hardly a difficult decision to make, requiring that Congress answer only the following questions:

1. Are we unable with existing revenues to pay our debts as they become due?

2. Do we have the ability to borrow the funds necessary to cover the shortfall?

3. Will the additional borrowing push us over the existing debt ceiling?

If the answer to these questions is “yes,” the debt ceiling needs to be raised. Congress has always managed to get through the process rather easily, voting to increase the debt ceiling 74 times since 1962.  So why the current impasse on a routine matter?

The answer, of course, is that the debate is about something other than the national debt. That something is the trilogy of programs known as Social Security, Medicare and Medicaid. Republican efforts in the past to privatize Social Security disappeared in the Washington fog. The Ryan budget, which includes the elimination of Medicare, has as much chance of passage as I do of appointment to the Supreme Court. (Medicare is already getting hammered throughout the country, even as severe unemployment has increased the number of eligible recipients.)

But Republicans view the debt ceiling debate as an opportunity to move forward with their plans for the Great Dismantling, strongly encouraged by two factors. The first is the large number of freshmen Tea Party representatives who share with the average college radical the notion that compromise bespeaks a lack of moral integrity. The second is the President’s propensity to compromise first and ask for something in return later. The strategy has already borne fruit; the Obama administration has offered cuts in Social Security and Medicare without extracting a single binding promise on revenue increases. Fully expecting a complete collapse of Democratic nerve, Republicans are now treating the public to something resembling the drag racing scene in “Rebel Without A Cause.”

So is it nevertheless an honest debate?  Not by a long shot.  For one thing, everyone knows the debt ceiling must be increased regardless of any other considerations.  Congressional hypocrisy is thicker than Louisiana sorghum on this point.  The phrase “debt ceiling,” after all, is a misnomer.  The limits imposed by the statute apply to borrowing authority.  The actual debt ceiling is whatever Congress decides it will be through its enactment of spending bills. When Republicans exacted continuation of the Bush tax cuts last fall, they certainly understood that the additional debt burden would require increasing the debt ceiling.  Therefore, opposing an increase in the statutory debt ceiling is equivalent to refusing to pay debts one has already incurred.

Moreover, there is nothing honest about hiding one’s real agenda.  Insisting on spending cuts which one knows cannot be accomplished without seriously damaging so-called entitlement programs is stealth politics posing as principled resolve.  The budget cut debate can take place at another time, and the Republican leadership knows it.

The mature solution is to terminate the present negotiations, adopt a reasonable debt ceiling increase as a stand-alone bill and take up spending and taxing measures separately.  Bookies aren’t taking bets on political maturity in the present Congress.

Sources: CNN Money; Austin, D. Andrew and Levit, Mindy R., “The Debt Limit: History and Recent Increases,” Congressional Research Service (Jan. 28, 2010).

57 thoughts on “The Phony Debt Ceiling Debate

  1. The real agenda is not hard to figure out. The radical Republican leadership has already said their first priority is to make sure the Obama Presidency is a failed one. Their second priority is to make sure he is a one-term President.

    Only one problem with that agenda. The Republican primary field is filled with a combination of political lightweights, crazy people, and unelectable wannabes.

  2. Do you mean to tell me that politicians are playing politics with the issue du jour? Who would have very suspected that. Can’t we go back to the salad days of the Bush administartion when good Democrat politicians never played political games?

  3. The rhetoric from both sides is so ridiculous, I’ve stopped listening. In my opinion it’s all purposeful bull-shit aimed at taking our attention away from what’s going on at the state level and what’s happening overseas.

    I refuse to be distracted and will spend a couple days next week on the road attending petition signing events. (People are getting very angry at republicans over the social security/medicare issue …)

    Every time I wonder if all this travel and speaking is a waste of my time all have to do is read one of the diatribes from the trolls who creep around this blog … yep, it damn well is worth every minute I spend on the road combating that crap.

  4. Blousie, this the first comment of yours where you’ve made a lick of sense. Did you skip your meds today?

  5. kderosa,
    Your attempt at equivalence is not only off the wall, it’s also part of the problem represented by the new republican mask of tortured conservative reasoning.

  6. The article is entirely too sensible and comprehensible to be entered into this debate. The President indeed negotiates peculiarly, like a buyer offering more than the list price for a house and then raising his bid before the homeowners response. Republican are hemmed in by three considerations and responding to the two least sensible.

    1. There is the Grover Norquist plan to shrink the government away.
    2. There is the Teabagger opposition to ever raising taxes, even though
    many of them rely on government programs like SS and Medicare and
    don’t.want them touched.
    3. There is a desire from their main money backers to maintain the financial
    status quo, these backers represent Wall Street and major
    Corporations..

    Every concession The President has made has signaled the Congressional Republicans that their remaining intransigence will be successful, thereby pleasing all of their constituency. Either The President, who is highly intelligent and/or his backers (also intelligent) are incompetent in the art of negotiation, or they are so beholden to the monied interests that they would gut two highly successful and needed programs. The other alternative to this which keeps rising to my consciousness, only to be forced down by my unwarranted optimism, is that we have lost all semblance of democracy and are not the rulers, but the ruled.

  7. As Karl Rove has said…The National Debt does not matter…if the party of obstruction and obstructionism keeps going it won’t really matter….FYI no continuing national debt until Nixon….Then RWR made sure it did not matter….why the party marionettes played in the garden….

    Thanks mike…

  8. Culheath, your attempt at an argument is not only off the wall but part of your intellectual problem. How’s that for equivalence?

  9. It is worth it, Blouise. The seniors that are living off $1100 dollars a month need protection. Just reading in the NYT about the Florida kids whose parents fly them to camp in Maine on rented jets. The rules favor the ultra rich. The tea party is demanding no revenue increases just cuts. Boehner would make a deal but the tea party won’t let him. I remember all the rhetoric on here last fall about not voting so things would get better.

  10. What is it over 700 days with no proposed Deomocratic budget? Yeah, that’s how you govern. It’s also why we have this little debt ceiling fiasco.

  11. At least the hated blue dogs believed in Social Security and Medicare unlike the tea party members that replaced them.

  12. First, I wasn’t arguing, simply noting – but you just demonstrated my point again…oh well.

    It’s culheath, as in Ferlinghetti, by the by.

  13. kderosa,

    Nope … 66 years old and no meds yet … which is a really good thing considering all the bat-shit crazy politicians I have to deal with on a monthly basis.

  14. Common-Sense GOP Effort Will Prevent Job-Crushing Default & Deny President Obama a $2.4 Trillion Blank Check
    Posted by Speaker Boehner Press Office on July 25, 2011

    Today, House Republican leaders will discuss with lawmakers a new framework designed to prevent a national default while ensuring any debt limit increase granted to President Obama includes spending reforms and cuts that exceed the debt limit hike. This common-sense plan is aimed at stopping President Obama’s indefensible quest for a debt limit increase that would run past the next election without a process in place to ensure spending is being cut as the debt ceiling is being raised. As Speaker Boehner said yesterday on FOX News Sunday, “I know the president’s worried about his next election. But my God, shouldn’t we be worried about the country?”

    President Obama desperately wants a large debt limit increase that will take him past the next presidential election.

    * The president is demanding a $2.4 trillion debt limit increase all at once – without spending cuts that exceed the hike – and refusing to accept a two-stage process that would ensure government spending continues to be cut as the debt ceiling is raised. Treasury Secretary Tim Geithner went on the Sunday shows yesterday to “insist” that any agreement “remove the possibility of a default from the politically heated presidential campaign season.”
    * As Majority Leader Cantor said yesterday, the president’s stance is purely political, and indefensible. “He cannot sustain or defend putting politics above the country’s interests in this situation,” Leader Cantor added.

    Granting the president’s request would amount to giving the president a $2.4 trillion blank check he can use to continue the spending binge that has driven our nation to the brink of a job-destroying downgrade and default.

    * The president has made it pretty clear he sees this debate as inconvenient compared to his desire to create more ‘stimulus’ programs. “I’d rather be talking about stuff that everybody welcomes – like new programs,” he said at a recent press conference.
    * He is trying to set up a no-win situation for taxpayers: either he gets his $2.4 trillion blank check, or America defaults.

    Speaker Boehner and Congressional Republicans have been clear that to pass the House, any debt limit increase must be accompanied by spending cuts that exceed the amount of the debt limit hike.

    http://www.speaker.gov/Blog/?postid=253461

  15. culheath and SwM,

    Democracy isn’t dead and this SS/Medicare issue is just the “flavor” of the election season replacing the old flavors of family values, abortion, gay-rights, etc. Republicans love the emotionally divisive issues.

    Just read kderosa’s comments as he attempts to anger posters with emotionally personal insults … it’s all cut from the same cloth. I tell groups I speak to not to get mad, just get serious.

    I don’t work for any particular politician … I work for issues.

  16. Well done Mike. This debt ceiling nonsense is just that. The Republicans do not want it to end because they think they can exact more concessions from the Democrats and Obama. However, I think that the President has reached his line in the sand. At least I hope so.
    Keep working Blouise. It is worth it.
    kderosa,how many times did the debt ceiling get raised during the Bush regime without the Dems exacting concessions? How is that for your false equivalence?

  17. Bdaman,

    There is no legitimate coupling of the deficit ceiling and budget deficits. The debt ceiling is based on what has already been spent…not future spending. So to infer that giving Obama a 2.7 trillion raise in the debt ceiling to allow more spending is dishonest in two ways; 1) it is not Obama who is receiving the raise, it’s the country, and 2) the raise is to cover debts we have already incurred. This whole politic is nothing more than a push for the great dismantling by people willfully ignorant enough to consider a national budget operates in the same manner as household budgets.

  18. I really loved their use of Christmas as a divisive ploy … Merry Christmas versus Happy Holidays … what a hoot that was.

    I get a lot of mileage out of that at meetings when I ask people how many of them “bought” into that issue. It’s a great ice-breaker when the aim is to get people to think rationally rather than emotionally.

  19. @culheath, actually raising the debt ceiling is required to deal with the future debt we are about to incur because we are continuing to spend more than we are taking in. So the two are legitimately coupled.

  20. 1) it is not Obama who is receiving the raise, it’s the country,

    Obama is the leader of the country so in effect he is.

    the raise is to cover debts we have already incurred. This whole politic is nothing more than a push for the great dismantling by people willfully ignorant enough to consider a national budget operates in the same manner as household budgets.

    If I buy something with my credit card today, which is spending money that I don’t have, and then I can’t make the payment when the bill comes due, what do I do?

  21. Mike Spindell,

    The other alternative to this which keeps rising to my consciousness, only to be forced down by my unwarranted optimism, is that we have lost all semblance of democracy and are not the rulers, but the ruled.”

    That conclusion has come up in my contemplation of our current ship of state as well.

  22. Bdaman,
    If I buy something with my credit card today, which is spending money that I don’t have, and then I can’t make the payment when the bill comes due, what do I do?

    Personally you either borrow money to meet the payment or increase your revenues or you get help and restructure your debt…or you walk away and wait for seven years.

    It’s obvious from your reply that you indeed do not understand the difference between a personal debt and a national collective one. Answer this: Who holds the majority of the US national debt?

  23. About 1/3 foreigners and 2/3rds U.S. citizens.

    Personally you either borrow money to meet the payment or increase your revenues or you get help and restructure your debt…or you walk away

    Which is exactly the choices the government has. Oh and cut spending where you can.

  24. Bdaman,
    Which is exactly the choices the government has.

    You forget about printing money, for one.

    Nevertheless, the restructuring of governmental spending and taxes still has nothing to do with paying what has already been spent. They are two different arguments and conflating them is exactly what this brouhaha is about.

    Oh and the part about it being Obama who gets the raise because he’s head of the country, the raise is to pay for Bush’s wars and and pharmco spending spree. Basically, Obama is having to pay for Bush’s unpaid for dinners

  25. And the feds can start selling off assets as well.

    If all we were concerned about was what has already been spent, then the debt ceiling doesn’t need to be raised.

  26. Oh and the part about it being Obama who gets the raise because he’s head of the country, the raise is to pay for Bush’s wars and and pharmco spending spree. Basically, Obama is having to pay for Bush’s unpaid for dinners

    and how much money has Obama spent while in office. How much did the national debt go up since his inauguration?

    and add sound fiscal policy

    Another Obamacare ‘Glitch’ Will Add Billions to the Deficit

    A new report from Cornell economist Richard Burkhauser and his colleagues has once again called into question the claims of the Congressional Budget Office (CBO) and White House that Obamacare would have only a minimal impact on employers’ decisions to offer their employees health care. The report warns that Obamacare could cost at least $50 billion more per year than originally thought.

    http://blog.heritage.org/2011/07/22/another-obamacare-glitch-will-add-billions-to-the-deficit/

  27. In 2006 then Sen. Obama voted against raising the debt limit; I’ve read that he was joined by every other Democrat Senator. Was that vote politics as usual?

    Accepting that the limit has been raised 62 times, at what point does doing the same thing meet the definition of insanity?

  28. From then Sen. Obama’s Floor Speech, March 20, 2006:

    The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

  29. I’ve read that he was joined by every other Democrat Senator. Was that vote politics as usual?

    Here’s the list

    Akaka (D-HI)
    Baucus (D-MT)
    Bayh (D-IN)
    Biden (D-DE)
    Bingaman (D-NM)
    Boxer (D-CA)
    Burns (R-MT)
    Byrd (D-WV)
    Cantwell (D-WA)
    Carper (D-DE)
    Clinton (D-NY)
    Coburn (R-OK)
    Conrad (D-ND)
    Dayton (D-MN)
    Dodd (D-CT)
    Dorgan (D-ND) Durbin (D-IL)
    Ensign (R-NV)
    Feingold (D-WI)
    Feinstein (D-CA)
    Harkin (D-IA)
    Inouye (D-HI)
    Jeffords (I-VT)
    Johnson (D-SD)
    Kennedy (D-MA)
    Kerry (D-MA)
    Kohl (D-WI)
    Landrieu (D-LA)
    Lautenberg (D-NJ)
    Leahy (D-VT)
    Levin (D-MI)
    Lieberman (D-CT) Lincoln (D-AR)
    Menendez (D-NJ)
    Mikulski (D-MD)
    Murray (D-WA)
    Nelson (D-FL)
    Nelson (D-NE)
    Obama (D-IL)
    Pryor (D-AR)
    Reed (D-RI)
    Reid (D-NV)
    Rockefeller (D-WV)
    Salazar (D-CO)
    Sarbanes (D-MD)
    Schumer (D-NY)
    Stabenow (D-MI)
    Wyden (D-OR)

  30. But according to Sheila Jackson when the repubs do it it’s because they are all racist.

    In her own words

    Only this president…only this one…only this one…read between the lines…what is different about this one that should put him in a position that he should not receive the same kind of respectful treatment…yada…yada…when it is necessary to pay our bills…I do not understand what I think is the maligning and maliciousness of this president. Why is he different, and in my community that is the question that we raise…in the minority community that is the question being raised…why has the debt limit been raised 60 times…

  31. Mahtso,

    I guess that would depend on what the intent behind raising the debt ceiling for each of those times was. Now if the intent was to say make the sky green, then yes it’d be insane, but if the intent was to say allow the U.S. to borrow more money to be able to pay the bills that had just come due, then no it isn’t.

  32. “Basically, Obama is having to pay for Bush’s unpaid for dinners”(culheath)

    Republicans are experts at “dine and dash” … it’s one of the few things they do really well.

  33. I almost get the impression that the republicans and the White House are trying to “Chapter 11″ the United States debt.

    Sorta like the way George Bush dealt with terrorism… “You are with us or you are against us.”

    In that Chapter 11 process, it almost would appear that any/all social programs would be discontinued; for the good of the country of course…

    That would also ensure that Obama would serve just one term.

    Look at how successful Chapter 11 proceedings have been for the airline industry… I’m only aware of three (major) carriers that haven’t used Chapter 11 (American, Southwest and Jetblue). Every other airline has used it at least once and each time it’s (citizens) employees have taken a very hard hit. Each time the unsecured creditors have taken a hit as well.

    Maybe Obama might just want to waterboard Donald Rumsfeld and find out where he disposed of that 2.3 trillion dollars on Sept 10th 2001.

    Would come in handy now…

  34. @Mike Appleton, Is that your only response to mahstso and Baadman pointing out to you how Obama and the Dems played the exact same kind of political shenanigans just five short years ago, that you just tried to call the Repubs on? Kinds makes your entire post an embarrassing farce, now doesn’t it?

  35. One of the virtues of Obama’s having agreed to the Republican demands early on in this debate and upping the ante with a greater debt reduction number is that he can now truthfully ask ‘can’t they take yes for an answer?’. That he insists on no short term raise of the debt ceiling should also play well with voters because who wants to have to deal with this circus every six months? People are sick of hearing about it and business, small business anyway, should not want this kind of insecurity (which could translate into higher interest rates for them if there is a lowering of the credit rating) as an ongoing concern.

    This kind of fight should actually work FOR the Democratic party in 2012 among the ‘undecided’ voters. The clear pattern of obstructionism among the Republicans is so obviously harming the country that it should be apparent to anyone that a large majority for Democrats in both the House and Senate is the only thing that will break the political log-jam. In another year and a half the voters should be about ready to do just that. I think the President and Democratic party is counting on the Republicans to deliver the independent voters to the Democrats and Bohener is so poor of a leader that they (the Republicans) will do just that.

    It would be a good thing if the Justice Department (spits) would work on challenging the laws being put in place to suppress votes since those laws affect primarily Democratic voters. Here in MO. a voter ID law is now going to be put on the ballot after the MO. Supreme court struck down a previous law mandating photo ID. This ballot initiative, which will give the legislature the ability to do what it did previously, is being challenged in court. The new initiative has some provisions to limit disenfranchisement so it might pass the court test. We are though distinguished as being the first in the nation to challenge such a law. Good for us!

    http://www.stltoday.com/news/local/govt-and-politics/article_d7cbfcac-3902-5e8f-87a9-8e4900bb651e.html

    “Lawmakers put photo ID amendment on Mo. ballot

    JEFFERSON CITY • Five years after the Missouri Supreme Court struck down a law requiring anyone wishing to cast a ballot to provide a government-issued photo ID, the Missouri Legislature has put the matter before the voters.”


    http://blog.showmeprogress.com/diary/6211/voter-photo-id-ballot-proposal-faces-legal-challenge

    “”I cannot imagine anything more cynical and shameful than using the voting process itself to trick voters into giving up their rights,” said Denise Lieberman, senior attorney for Advancement Project, a civil rights organization that works to eliminate barriers to voting and has been fighting photo ID laws across the country. “Just as the Missouri Supreme Court rejected Missouri’s photo ID law as a ‘heavy and substantial burden’ on voting rights, the court should reject this deceptive initiative. It does not make clear to voters that they will be giving up a fundamental right.”

    The lawsuit – the first-ever challenge to a constitutional amendment on photo ID laws and the first lawsuit in the nation filed challenging the rash of photo ID proposals introduced in states across the country this year- was filed on Wednesday and names eight Missouri voters as plaintiffs….”

  36. Mr. DeRosa:

    1. Voting to raise the debt ceiling is an exercise without substance, as silly as the debt limit itself. It is a cousin to the much discussed balanced budget amendment, a plea by an alcoholic to stop him before he takes another drink. And were we to lock the liquor cabinet this afternoon, someone would locate another key before happy hour. Since you appear to favor political, rather than legal, solutions to political problems, I suspect you would agree that the proper solution to fiscal irresponsibility is not to amend the Constitution, but to amend the congressional membership roll.

    2. As for the comments of mahtso and Bdaman, I was disabused of the effectiveness of the “Jimmy did it, too” argument by the time I was, oh, 9 or 10.

  37. Lottakatz: I don’t think we’ll ever find Tom Tomorrow in the morning paper.

    Swarthmore mom: Thanks so much for the really depressing link.

  38. rafflaw:

    I agree with your comment about Perry’s electoral prospects. But I also believe that he can suck up HUGE amounts of money for a campaign.

  39. Mike A.,
    he can no doubt get some decent money, but with so many Republican candidates running for office, they are all competing for a finite amount of funds. I think they are spending themselves to death.

  40. Nowhere on American news media is the real issue behind the debt problem even alluded to. Not even Ron Paul has the stones to say it. The Federal Reserve scam. The unconstitutional control of U.S. currency by a cartel of private banks.

    “If Americans ever allow banks to control the issue of their currency, first by inflation and then by deflation, the banks will deprive the people of all property until their children will wake up homeless”
    – Thomas Jefferson

    “Give me control of a nation’s money and I care not who makes her laws.”
    – Mayer Amschel Rothschild

    “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
    -Henry Ford

    “Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States” — Sen. Barry Goldwater (Rep. AR)

    “We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it”. — Congressman Louis T. McFadden in 1932 (Rep. Pa)

  41. First, the Federal Reserve prints the money. Then, with a hefty amount of interest attached upwards of over 30%, it is loaned to the nation. Say, for example, we are loaned 1Trillion dollars. Unknown to most of the public, that interest must be paid back. 30% of a Trillion is approximately 3.33 Billion dollars. That is the amount that must be paid back on top of what has been borrowed. Totaling 1.333 trillion dollars. Here is where it gets really crazy. If there was only 1 Trillion printed, how could we possibly pay back 1.333 trillion ? The answer is simple. You can’t pay it back, ever. It’s a never-ending cycle of debt becasue of the compunded interest. The Gregg report admitted that income tax is almost entirely spent servicing the interest on a debt to the Federal Reserve – private banks! When the loan is finally called in we are forced to pay all that we have and then borrow more to cover interest payment and living expenses.

    To guarantee themselves interest payments, along side the Federal Reserve Act was the Income Tax law know as the 16th Amendment to the Constitution. Prior to 1913 there was no such thing as an income tax. The sole purpose of this tax was to make payments to the Federal Reserve to the issuance of our currency.

    This is the ‘Federal Reserve’ :

    1. Rothschild Banks of London and Berlin
    2. Lazard Brothers Bank of Paris
    3. Israel Moses Sieff Banks of Italy
    4. Warburg Bank of Hamburg, Germany and Amsterdam
    5. Kuhn Loeb Bank of New York
    6. Lehman Brothers Bank of New York
    7. Goldman Sachs Bank of New York
    8. Chase Manhattan Bank of New York (Controlled By Rockefellers)

    End the scam. Write your Congressman to repeal the Federal Reserve Act of 1913. Fight the power.

  42. Correction, 330 billion, but you catch my drift … and the actual ROI is unknown tu we mere mortals …..

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