One of the very last items to be voted on by both the House and the Senate before the Christmas break was the raising of the debt limit in the short term as a stop-gap measure to ensure that the government could continue borrowing and paying bills. The House vote of 218 to 214 for H.R. 4314 passed the measure, raising the national debt ceiling by $290 billion with 39 Democrats and 175 Republicans voting against the increase. No House Republicans voted for the debt limit increase. The Senate passed the same measure by a 60 to 39 margin on Christmas Eve, the vote divided almost perfectly down party lines -- Senator Evan Bayh (D-Ind.) being the only Democrat to vote no.
One of the very first items to be tackled by the Senate upon its January 20, 2010 return to session, with the House scheduled to take up the same issue a little bit later, is the raising of the debt limit by another $1.8 trillion or so.
Congress has raised the debt ceiling three times in the past two years. Currently the national debt, which reached $6 trillion in 2002, stands at $12.3 trillion. This national debt increases by $4 billion per day, with each citizen’s share now at an estimated $40,000 and climbing quickly.
During the House floor debate on December 16, 2009, Democrats and Republicans attempted to blame one another for this sorry state of financial affairs.The air was thick with new-found fiscally responsible-sounding rhetoric, mainly from Republicans, who did in the end all vote against raising the debt limit.
Representative Jeb Hensarling (R-Tex.) rose to say, “Madam Speaker, never in history have so few acted so fast to indebt so many.” Truer words would be hard to find on the House floor these days. Speaking of the Democrats’ willingness to allow a $1.4 trillion deficit, a first for the nation, Hensarling said, “They passed a budget that will triple the national debt in just 10 years, and they are causing us to borrow 40 cents on the dollar from the Chinese and send the bill to our children and grandchildren.”
David Camp (R-Mich.) stated, “The bill before us is a candid admission by the majority that their tax, borrow, and spend ways have driven America deeper and deeper into debt.” He repeated a 2006 quote from then-Senator Obama:
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. America deserves better.
Camp noted that the government had indeed maxed out its credit cards, but that the legislation to raise the debt ceiling doesn’t pay the bill, “It doesn’t even make the minimum monthly payment. It simply asks for more credit.”
Rep. Mike Pence (R-Ind.) had the good grace to admit that the Republicans doubled the national debt with 8 years of overspending. He credited the American people with making the necessary sacrifices within their small businesses and families to cut back and rein in spending to keep within budgets. According to Pence, the reason Americans have a right to be frustrated with the tax-and-spend like there’s no tomorrow government policies “is because they see a national government that is completely out of step with the character and the values and the sacrifice that the American people are practicing every day -- not that it’s anything new.”
The prize for the most charming but disingenuous rhetoric belonged to a Democrat. Charles Rangel (D-N.Y.) painted his reasons for wanting to continue the teen-age style spending spree in the most patriotic terms. Rangel said that because Congress has the “full faith and credit of the United States of America” in its hands, in order to keep that faith and credit the United States must pay its debt. He urged his confreres to “be with your country,” and vote yes.
Rep. Steny Hoyer (D-Md.) echoed Rangel’s ultranationalist approach saying, “What matters is that America pays its bills,” as it’s the “only option for a responsible country.”
This is what can be expected then, when the House and Senate have another go at raising the debt ceiling, with perhaps a few new angles thrown in.
Already mentioned during the floor debate for H.R. 4314 were some new steps that might be taken to address the debt issue; PAYGO and a Safe commission, or some other similar commission, are being proposed as “safeguards” to the budget appropriation process.
PAYGO is supposed to be a tool to help congress remain fiscally responsible by making sure any spending is balanced by equal savings or cutbacks in other places. President Obama proposed his own version of PAYGO in June. He wanted the Office of Management and budget to maintain a ledger that showed a 10-year average of the effects of budget expenses and baseline tax levels. Then, any costs that lacked payment authorization by Congress would have to be specifically budgeted for; any tax cuts would require an increase in tax revenue.
Because there are a multitude of exceptions -- PAYGO only applies to new or expanded entitlements, and never to Medicare payments to doctors, estate and gift taxes, or tax cuts enacted in 2001 and 2002 -- the Wall Street Journal called Obama’s proposal a “coverup” and a “budget gimmick":
The real game here is that the President is trying to give Democrats in Congress political cover for the health-care blowout and tax-increase votes that he knows are coming... the paygo ruse gives blue Dog Democrats cover to say they voted for “fiscal discipline,” even as they vote to pass the greatest entitlement expansion in modern history.
The Journal also noted that PAYGO would make it easier to raise taxes in 2011 and make impossible any tax cuts for years and years after that. PAYGO also doesn’t apply to any discretionary spending, so Congress can easily reclassify certain entitlements as “discretionary spending,” circumventing any supposed PAYGO “safeguards.”
While a pay as you go system works fine for cell phone companies whose customers deal in reality and cold hard cash, it doesn’t with an unrestrained, debt-happy federal government that has a penchant for bending and twisting all rules and regulations, no matter how sacred. Besides, instituting PAYGO after running up trillions in debt is a bit like closing the barn door after the horses are already out, and makes it just another political cover term.
Senate Budget Committee Chairman Kent Conrad (D-N.D) and Senator Judd Gregg (R-N.H.) have already written legislation to create a "Bipartisan Task Force for Responsible Fiscal Action" commission to review government debt, fiscal policies, and make recommendations. Just as with the current PAYGO rule, it wouldn’t hold the force of law but will be used as an attempt at pacifying the taxpayers.
Tax hikes are another sure bet as Congress pretends to balance the budge. In fact, the Pew Charitable Trust has created the Committee for a Responsible Federal Budget (CRFB) to work in partnership with the White House and Congress specifically to:
- Negotiate a specific package of spending reductions and tax increases [Emphasis ours] that are gradually phased in to protect the recovering economy; and
- Create an automatic enforcement mechanism to keep revenues and spending on target.
Some members of the CRFB are the exact same players who helped create the ticking economic time-bomb they now claim to have a serious interest and duty in solving -- Alan Greenspan, Paul Volcker, Leon Panetta, Larry Summers, Nancy Kassenbaum Baker, John W. Snow and Peter G. Peterson, just to name a few.
This committee cares not a whit about America’s devaluing dollar and long-term economic debtor consequences, nor do they have the American taxpayers’ interests at heart. They are instead happy to oversee, according to their own literature, merely a stabilization of the debt because “creditors need to see that the United States is serious about stabilizing the federal debt over a reasonable timeframe.”
There will probably be some contentious debate on this subject as both House Majority Leader Steny Hoyer and Madame Speaker Pelosi are in favor of the PAYGO fraud, while the Blue Dog Democrats are more favorably inclined toward the special "Bipartisan Task Force for Responsible Fiscal Action" commission route.
Many of our representatives seem to be on board with Rebecca W. Rimel, president and CEO of The Pew Charitable Trust who said, “The federal budgeting process lays the foundation and should establish the rules of the game for all policy decisions.”
They should, instead, adhere to their oath of office and uphold the Constitution by limiting government size and spending; it is the prescriptions of the Constitution which should be the measuring stick, not the grotesquely inflated and misshapen federal budget process that has evolved over time.
Let’s help straighten them out on the matter by voicing opposition to any increase in the debt limit unless it is accompanied by immediate cuts in unconstitutional spending either to balance the budget or, better yet, to create a budget suplus that can be applied to reducing the national debt.