In May, Congress will begin debate on our nation’s debt limit. The debt limit is an alarm bell built into our nation’s laws, which forces members of Congress to confront out-of-control spending when our debt reaches a certain level. Five times in the last four years, we have ignored this alarm bell. This time must be different.
It would irresponsible and reckless for them to even consider raising the limit without also enacting spending cuts and reform. The nation’s credit worthiness is directly tied to our fiscal stewardship, not our desire to borrow. America would send a strong signal to global financial markets by taking prudent steps to address our out-of-control spending habits, not by blindly giving ourselves another blank check.
Today’s national debt—the public debt that government has accumulated to finance its out-of-control spending—is approximately $14.3 trillion. To put that into perspective, the government’s annual budget for 2011, which is in itself bloated, is roughly $3.7 trillion. And to put the future health of our economy in perspective, President Obama proposed in his 2012 Budget proposal that we add $9 trillion to that debt over the next ten years.
Our government borrows nearly 40 cents on every dollar it spends. And the more we borrow, the higher these projections go. In other words, our national debt isn’t a problem…it’s a crisis.
Many in Washington claim we should, once again, ignore the debt limit alarm bell. They say coupling a debt limit increase with spending cuts and reforms puts the full faith and credit of the United States at risk. This is nonsense.
As Heritage economist J.D. Foster, Ph.D., noted in January: “Refusing to raise the debt limit would not, in and of itself, cause the United States to default on its public debt. Both immediately and long after it reaches the debt limit, the government would have far more than enough revenue coming in that the Secretary of the Treasury could use to pay interest on the debt. Nor would preserving the current debt limit put at risk the full faith and credit of the United States government, as the President’s chief economic adviser has claimed. The government would continue to pay net interest as it comes due.”
It is critical conservatives do not give in to the scare tactics of the left. They have one goal in mind: Distracting us from our nation’s fiscal crisis through fear and intimidation.
Over the past month, Washington began debating this fiscal crisis. First we had the debate on finishing up the 2011 budget, since the last Congress was so irresponsible with your money; they didn’t even bother to pass a budget for the first time in modern history. We also debated competing budget proposals and “frameworks.”
House Budget Chairman Paul Ryan’s (R-Wi.) proposal to reform our tax and entitlement system and get America moving on the right path to eliminating our debt passed largely along party lines on Friday (235-193). Earlier in the week, desperate to have a voice in the conversation he had continually ignored, President Obama offered a “framework,” to modify his earlier failed budget proposal, that “set goals” to reduce the debt by $4 trillion over ten years, mostly through hefty tax hikes on investors and job creators.
Similar to the budget debates, the discussion over the debt limit has been rife with hyperbole, false choices and irresponsible conjecture. It started when White House economic adviser Austan Goolsbee said we would risk damaging the “full faith and credit of the United States” by not blindly raising the ceiling. Treasury Secretary Timothy Geithner warned Congress in January that we would need to act as soon as March 31 to avert a global crisis. That date came and went, as we predicted. Yesterday morning, on Meet the Press, Geithner continued intimidating Congress calling any delays “catastrophic.”
President Obama told the AP last week that failure to raise the debt ceiling “could plunge the world economy back into a recession.” This hysteria is simply not grounded in reality. The world economy will be in much worse shape if America continues to dishonestly approach its fiscal future.
Congress has time to do the right thing. Members should promptly have a full discussion of the level of debt they want to set and begin immediate, substantial spending cuts to demonstrate the seriousness with which they take the nation’s fiscal problems. These should be followed by additional changes such as hard spending caps and entitlement reforms that would return the nation to fiscal sanity and keep it there.
President Obama himself voted against raising the debt ceiling in 2006 saying: “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure…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.” First, the White House said he did so because he knew his vote wouldn’t count. Courageous. Now, Obama conveniently says that vote was simply a mistake.
Whether he believed it or not, or was merely taking political cheap shots, Obama’s rhetoric was closer to reality in 2006. We are shifting “the burden of bad choices onto the backs of our children and grandchildren,” and the time to stop doing so is now. The upcoming debt limit vote isn’t just a convenient opportunity, but a national obligation.