PrintJanuary 18, 2011
Why Have a Debt Ceiling?
Every Passover, Jews ask, "Why is this night different from all other nights?" As Republicans in the newly-minted 112th Congress take pooper-scoopers in hand to begin cleaning the Augean Stables of the 111th Congress, one might similarly ask, "Why will the upcoming debate on raising the debt ceiling debate be different from all other debt ceiling debates?"
The debate will be different this time because this Congress will be debating whether to raise the debt ceiling under the scrutiny of an electorate that is ready to raise the roof if their elected officials fail -- again -- to enact meaningful spending cuts.
And that is why this writer fears for the future of the Republican Party when he hears statements like this recent one by Paul Ryan, one of the "young guns" who supposedly is going to guide the nation out of the fiscal mess that the previous, Democrat-dominated, Congress got us into: "You can't not raise the debt ceiling, but we want to have real fiscal controls, real spending cuts to go with this."
Excuse me for pointing out the obvious, but doesn't the first portion of that sentence render the remainder meaningless? If Ryan says, "You can't not raise the debt ceiling," is he not as much as telling President Obama and congressional Democrats that regardless of how negotiations go, ultimately, at the end of the day, after all the fluster and bluster, Republicans will vote to raise the debt ceiling? In which case, why should Obama and the Democrats agree to anything?
Senator Tom Coburn, on the other hand, said that he would filibuster any debt ceiling legislation that does not include at least $300 billion in spending cuts.
I'm with Tom, and so are the American people, 71% of whom said in a recent poll that they do not want the debt ceiling raised at all, regardless of consequences.
It's also different this time because this time, there are Fox News and the internet. Last time, the mainstream media -- the only media there were in those days -- could hide the polls showing Bill Clinton's plunging ratings, clear evidence that Republicans were winning the issue, behind wall-to-wall "reporting" of furloughed federal workers suffering from their temporary inability to earn twice as much as people doing the same job in the private sector. The mainstream media could go on about widows, orphans, puppies, and kittens who did not receive their usual check from the government. But not this time.
Keep in mind also that the notion of the U.S. defaulting on her debt if the debt ceiling is not raised is nonsense, as Greg Ip of The Economist explains. All the Republicans need to do is to say so, and why. Reuters blogger Felix Salmon shows how it's done:
In any given month, the government's income dwarfs its debt-service obligations, which means that the government could simply pay all interest on Treasury bonds out of its cashflow. Greg [Ip] hasn't run the numbers on principal maturities, but I'm pretty sure that they too could be covered out of cash receipts -- and when that happened, of course, the total debt outstanding would go down, and we wouldn't be bumping up against the ceiling any more [sic].The point here is that the government has enormous expenditures every month, and debt service constitutes an important yet small part of them. If the debt ceiling weren't raised, it stands to reason that just about any other form of government spending would get cut before Tim Geithner dreamed of defaulting on risk-free bonds.
And finally, there is the new Speaker of the House. John Boehner is not Newt Gingrich, and the American people know it. For one thing, Gingrich did not have Gingrich to provide an example -- several examples, actually -- of what not to do. Boehner does. He's a smart, savvy political player who has already demonstrated his ability to avoid Gingrich's mistakes. And he has the kind of inner confidence coupled with an outer humility that Gingrich never had.
So my advice to Paul Ryan: Start channeling your inner Tom Coburn and stick to your guns. Fox News, the internet, and 75% of the American people have got your back. Do that, and you'll win, just as you would have won the first time. Do not do that, and you'll pay for your betrayal in 2012 -- big time.
The American people want the federal government downsized and spending reduced. They elected you to do it, and you promised that you would. Not only will they not be angry with you if you keep that promise, but they will be extremely angry if you don't keep it.
And when an astonished mainstream press ask you if you really, really are willing to risk a federal government default, ask them this simple but profound question: Why do we have a debt ceiling? Why set a limit on federal borrowing if we're going to routinely raise that limit every time we approach it? Let Obama and congressional Democrats chew on that one for a while, and let's see if they can come up with any answer that the American people will accept.
My bet is that they can't.
Gene Schwimmer is the author of The Christian State.
