The Democrats have refused to Raise the Debt Ceiling for Republican Presidents

Posted by PITHOCRATES - October 8th, 2013

History 101

The Democrats opposed Raising the Debt Ceiling for Republican President Dwight Eisenhower

President Obama and the House Republicans are at a standoff.  At the center of the debate is Obamacare.  The House Republicans want to defund Obamacare.  They didn’t like it when it cost $1 trillion over ten years.  And they like it even less now that the CBO has revised its cost to $3 trillion.  It has frozen hiring.  And pushed people from full-time to part-time.  President Obama has also revised the law.  Taking on legislative powers that the Constitution gives only to Congress.  With the one year delay for the business mandate being especially galling to Republicans.  As well as the 75% subsidy members of Congress and their staff get.

The House Republicans have reduced their demands to basically giving the president a continuing resolution to fund all of government if he would only give the American people what he gave to his friends in Big Business.  A one year waiver of the individual mandate.  Infuriating the president.  Saying he will not negotiate with terrorists taking the American people hostage.  However, he said he will negotiate with the Republicans.  After they give him everything he wants.  Including raising the debt limit.  For shutting down the government is one thing.  But messing with the full faith and credit of the United States is another.  With the Republicans having the gall to demand spending cuts before raising the debt ceiling.  This was just unprecedented.  Never before did anyone use the debt ceiling to bully a president before.  In the past Congresses always raised the debt ceiling whenever a president requested.  Whistling a happy tune in the process.  Except, of course, in 1953 (see Can Debt Ceiling Debates Be Useful? History Says Maybe. by Joseph J. Thorndike posted 8/28/2013 on the Huffington Post).

The idea of using the debt ceiling for leverage is not new. Indeed, the nation’s first debt limit crisis hinged on it. In the summer of 1953, President Dwight Eisenhower asked Congress for a modest boost in the debt ceiling. When austerity-minded lawmakers refused, it prompted a crisis that brought the nation to the brink of default – or to its fiscal senses, depending on your point of view…

Eisenhower didn’t believe that spending cuts would be sufficient to keep federal debt under the cap. “Despite our joint vigorous efforts to reduce expenditures,” he told Congress, “it is inevitable that the public debt will undergo some further increase.” On July 30, Eisenhower asked Congress for an increase in the debt ceiling from $275 billion to $290 billion…

Sen. Harry F. Byrd, D-Va., took the lead in fighting the increase. Raising the limit would be “an invitation to extravagance,” he declared. Keeping the present cap, moreover, would encourage much-needed economy. “It may be that the administration would be forced to operate on a very prudent and conservative budget in order to avoid an increase in the debt limit,” he predicted.

A host of senators joined Byrd’s campaign to reject the increase. The New York Times reported that Democratic opposition was “almost solid,” and many Republicans were also prepared to break with the president…

As a leverage goes, it was pretty effective. Almost immediately, Eisenhower told his department heads to cut their spending. “It is absolutely essential that you begin immediately to take every possible step progressively to reduce the expenditures of your department during the fiscal year 1954,” he told them.

So it started early.  And it started with the Democrats.  Holding the debt limit hostage to get what they want.  And in 1953, the Democrats got what they wanted.  They forced President Eisenhower to make spending cuts.  Just like the Republicans asked for in 2011.  And will ask again now.  But President Obama was not as reasonable in 2011 as President Eisenhower was.  And he is saying he will be even less reasonably now.

The Democrats opposed Raising the Debt Ceiling for Republican President Ronald Reagan

So was 1953 an isolated incident?  Were the Democrats more accommodating at other times when a president asked them to raise the debt ceiling?  As President Obama would have us believe?  Well, they weren’t very accommodating in 1984.  When President Ronald Reagan asked Congress to raise the debt ceiling (see In 1984, debt debate looked different to Biden, GOP by Stephen Dinan posted 7/19/2011 on The Washington Times).

With time running out on a looming debt crisis, the president and his allies in the Senate are fighting to win a raise in the government’s borrowing limit, only to be stymied by a minority insisting that a spending freeze be part of the deal.

Sounds like present day, but it was October 1984 — when the partisan roles were reversed. Republicans controlled the White House and the Senate, while Democrats controlled the House. Democrats also could sustain filibusters in the Senate and were balking at raising the debt ceiling unless it was attached to big spending cuts…

One of the leaders of that 1984 Democratic revolt — a man who tried to impose a spending freeze and fought for a smaller debt increase than President Reagan wanted — was none other than current Vice President Joseph R. Biden, then a senator from Delaware and now President Obama’s right-hand man in negotiations with Congress.

“I must express my protest against continually increasing the debt without taking positive steps to slow its growth. Therefore, I am voting against any further increase in the national debt,” Mr. Biden said in a floor speech just before helping fellow Democrats defeat an increase of $251 billion on a 46-14 vote.

Once again the Democrat-controlled House refused to raise the debt ceiling.  So 1953 was not an isolated incident.  But the beginning of a pattern of Democrat willingness to risk the full faith and credit of the United States for political reasons.  To get their way despite losing the election to President Reagan.  Apparently back then elections didn’t have consequences.

How embarrassing it must be for the vice president.  Being part of an administration trying to do what the Reagan administration did when he stood in opposition.  Imagine trying to argue for something you argued against previously?  Thankfully, it was only the vice president that had such a hypocritical past.  Imagine how embarrassing it would be if the president had such hypocrisy in his past.

The Democrats opposed Raising the Debt Ceiling for Republican President George W. Bush

Well, as it turns out, another young Democrat senator went toe-to-toe with another Republican president over the debt ceiling.  And he just didn’t vote against it.  He made a speech.  On the record.  For posterity.  To prove he was no spendthrift.  At least, not when a Republican was in the White House.  That president was George W. Bush.  And that senator was, of course, Barack Obama (see Obama Really Wishes He Never Gave This Speech About The Debt Ceiling by Walter Hickey posted 1/14/2013 on the Business Insider).

In 2006, then-Sen. Barack Obama gave a floor speech defending his decision to vote against an increase in the debt ceiling under President George W. Bush…

Here are some of the key parts of Obama’s speech:

Mr. President, I rise today to talk about America’s debt problem. 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. I therefore intend to oppose the effort to increase America’s debt limit.

In the midst of the first debt-ceiling standoff in 2011, Obama was asked about his flip by ABC’s George Stephanopoulos. He chalked it up as a “political vote” and said his mindset changed as President.

Hypocrisy, thy name is Barack Obama.

Interesting.  It was okay for him to do what the House Republicans are doing now when he was in Congress.  When there was less debt.  And less of a debt crisis.  But it’s not okay for the House Republicans to do so now.  When there is more debt.  And a greater debt crisis.

So what is the right thing to do?  Well, if you’re President Obama the right thing to do is what he wants to do.  Not what is best for the country.  For if you argue both sides of the same issue at different times it means you’re more interested in what’s best for yourself.  Not the country.  Unless he evolved on this issue, too.  If so, perhaps we should ask for President Obama’s resignation.  For if he keeps evolving on issues he must be too ill-informed or naïve to be president.

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Debt Ceiling Deal Light on Cuts and Sets Stage for Future Taxes

Posted by PITHOCRATES - August 1st, 2011

$2.4 Trillion Debt Ceiling Deal may spend $96.68 for each Dollar Cut

Everyone seems to hate the budget deal to raise the debt ceiling.  Conservatives are saying they’ve been screwed.  Liberals are saying they’ve been screwed.  Interesting.  So exactly what did they agree to in order to hike the debt ceiling $2.4 trillion?  Which, incidentally, is the largest increase in history (see Small spending cuts to have little economic impact by Christopher S. Rugaber, Associated Press, posted 8/1/2011 on Yahoo! News).

Discretionary spending, which excludes Social Security, Medicare and Medicaid, would be cut by only $7 billion in 2012 and $3 billion in 2013, according a summary by Senate Democrats. That’s a tiny fraction of the nation’s $14 trillion economy…

The independent Congressional Budget Office offered its own analysis Monday. It said the agreement would reduce government spending by $25 billion next year. That’s compared to current law, which factors in a projected increase in spending.

The first phase of cuts would reduce spending by $917 billion over 10 years. A congressional committee would decide on a second phase of cuts totaling $1.5 trillion.

Whoever’s numbers you believe one thing is sure.  That’s not a lot of cuts.  The cuts are dwarfed by the amount of new spending the $2.4 trillion debt ceiling increase will give.  In fact, if you use the high $25 billion number, one could say these cuts are negligible.  For if they spend that $2.4 trillion next year, the cuts will only be 1.03% of the new spending.  Or an additional $96.68 spent for each dollar cut.  Now, granted, my math skills may be outdated, but I think if you spend more than you cut while you already have a $1.6 trillion deficit, I don’t think you’re going to reduce the deficit.  But that’s just me using arithmetic.

$7 Billion is a little shy of the $4 Trillion in cuts S&P said would prevent Credit Downgrade

And this is what was important.  Deficit reduction.  To stop spending money we don’t have.  So the debt doesn’t rise so high that it threatens the full faith and credit of the United States.  As S&P warned would happen if we don’t make some serious spending cuts (see FreedomWorks Opposes Budget Control Act of 2011 by Jacqueline Bodnar posted 8/1/2011 on FreedomWorks).

“The deal has few immediate cuts totaling one half of one percent of the budget, with most savings coming in the later part of the decade,” commented Matt Kibbe, President of FreedomWorks. “How can we be serious about reducing the debt limit when we are not even talking about cutting programs like AmeriCorps and agricultural subsidies? This is not the serious reform Tea Partiers demanded last November.”

Standard & Poor’s has stated that anything less than $4 trillion in cuts will lead to an inevitable downgrade from the United States’ current AAA credit rating. “The ‘Cut, Cap, Balance Act’ is the only option on the table that would preserve the nation’s AAA credit rating and secure our long-term economic future,” added Kibbe. “

So S&P will downgrade the full faith and credit of the United States despite this deal.  So it doesn’t appear that the Republicans got much for that additional $2.4 trillion of spending.  So it would appear that the Democrats screwed the Republicans.  But that sure isn’t how some see it.

Ruthlessly dictating Terms to the Opposition is Okay as long as Liberals are doing the Dictating

In fact, some are spitting mad (see The President Surrenders by Paul Krugman posted 7/31/2011 on The New York Times).

For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status.

Come on, Paul, tell us how you really feel.

And then there are the reported terms of the deal, which amount to an abject surrender on the part of the president. First, there will be big spending cuts, with no increase in revenue. Then a panel will make recommendations for further deficit reduction — and if these recommendations aren’t accepted, there will be more spending cuts…

And even now, the Obama administration could have resorted to legal maneuvering to sidestep the debt ceiling, using any of several options. In ordinary circumstances, this might have been an extreme step. But faced with the reality of what is happening, namely raw extortion on the part of a party that, after all, only controls one house of Congress, it would have been totally justifiable…

In the long run, however, Democrats won’t be the only losers. What Republicans have just gotten away with calls our whole system of government into question. After all, how can American democracy work if whichever party is most prepared to be ruthless, to threaten the nation’s economic security, gets to dictate policy? And the answer is, maybe it can’t.

I don’t recall any such concern about the Democratic process that rammed Obamacare through the Congress along strictly party lines.  As bad as it is, the current deal was bipartisan.  Which is more than you can say about what Pelosi, Reid and Obama did with their health care bill.  Even the polls showed the people didn’t want it.  And many who voted for it paid the ultimate price at the next election. 

Apparently, ruthlessly dictating terms to the opposition is okay as long as liberals are doing the dictating.  In fact, liberals would be fine with doing away with the Democratic process if they held full power.  Let’s just hope they don’t resort to any legal maneuvering to make that happen.

The Sneaky Little Bastards are going to Escape those Spending Cuts and get their Tax Hikes

Liberals aren’t idiots.  They are very pragmatic.  And they’re liars and sneaks.  I think all this protesting is just smoke to make all the Tea Party Republicans think they’ve come out as winners in this deal.  Just take a closer look at the deal.  Negligible spending cuts up front.  A panel to determine future spending cuts (probably more heavily weighted on cuts that matter like out of control health care spending).  And a trigger for when that panel fails.  Which will make half of those future spending cuts come from defense.

And it gets better.  As this last round of negotiations has shown agreeing on spending cuts is next to impossible.  Even with the trigger those Medicare spending cuts are not likely to happen.  And with Obama just getting another $2.4 trillion to spend, that deficit isn’t going to get any smaller.  In fact, it’ll only get bigger.  Which means, of course, they will have no choice but to talk about revenue again (i.e., new taxes).  Say goodbye to the Bush tax cuts.  For they will let them expire next time.  Also, Obamacare kicks in after the 2012 election.  As do all those new taxes to pay for it.  More taxes upon more taxes.  Which is a lot of new taxes.

The sneaky little bastards are going to escape those spending cuts.  And get their tax hikes.  The Great Recession will linger on.  Or fall into full blown depression.  So it’s really clear who the winners and losers are in this debate.  The Ivy League liberal ruling elite are the winners.  And the American people are the losers.  As their country is transformed into a third world banana-republic.  Where the ruling elite at the top live very well.  And everyone else is poor and oppressed.  

Viva la Revolucion, El presidente.  Viva la Revolucion.

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