It’s Time for Congress to Pay Its Bills
In their never-ending quest to destroy entitlements and slash the social safety net, Republicans are once again willing to risk the entire U.S. economy in order to advance their ideological agenda — an agenda overwhelmingly rejected by voters in last year’s elections.
Last time Republicans took the economy hostage, the summer of 2011, Speaker Boehner made clear that he understood the implications of a national default:
Boehner said it would mean “financial disaster” for the global economy if Congress were unable to come to a deal to raise the debt ceiling this spring.
“That would be a financial disaster, not only for us, but for the worldwide economy,” Boehner said on “Fox News Sunday” of the risk of default. “I don’t think it’s a question that’s even on the table.”
Still, rank-and-file Republicans and even a top member of the House Republican leadership are now talking openly about shutting down the government or defaulting on our obligations:
“I think it is possible that we would shut down the government to make sure President Obama understands that we’re serious,” House Republican Conference Chairwoman Cathy McMorris Rodgers of Washington state told us. “We always talk about whether or not we’re going to kick the can down the road. I think the mood is that we’ve come to the end of the road.”
Worse yet, Republicans may force a default or government shutdown just to placate the Tea Party extremists in the House:
GOP officials said more than half of their members are prepared to allow default unless Obama agrees to dramatic cuts he has repeatedly said he opposes. Many more members, including some party leaders, are prepared to shut down the government to make their point. House Speaker John Boehner “may need a shutdown just to get it out of their system,” said a top GOP leadership adviser. “We might need to do that for member-management purposes — so they have an endgame and can show their constituents they’re fighting.”
We know that the president is serious about spending cuts, having already signed $2.4 TRILLION of deficit reduction into law — three-quarters of which came from spending cuts. But it’s not merely spending cuts that Republicans are demanding. They want draconian cuts to Social Security, Medicare, Medicaid, and other programs. As President Obama said at a press conference today, Republicans have always had “suspicions” about these and other government programs and they see taking the economy hostage as their only opportunity to push through their unpopular ideological agenda.
Let’s review what happened last time Republicans took the economy hostage in this way:
- DOWNGRADE: One of the three major rating agencies downgraded the nation’s credit rating for the first time ever, citing the GOP’s intransigence on raising revenue.
- DEFICIT: Ironically, the debt ceiling showdown actually increased the deficit. It resulted in $1.3 BILLION in higher borrowing costs in 2011 alone. It is estimated that it will result in $18.9 BILLION in higher borrowing costs over the next decade.
- DECLINE: The manufactured crisis lowered consumer confidence, slowed down consumer lending, and created uncertainty for business, resulting in “a pretty big hit to a fragile recovery.”
If Republicans force a default in order let the Tea Party element of their party “get it out of their system,” the economic consequences could be catastrophic. The president today also outlined the more immediate consequences for many Americans:
If congressional Republicans refuse to pay America’s bills on time, Social Security checks and veterans’ benefits will be delayed. We might not be able to pay our troops, or honor our contracts with small business owners. Food inspectors, air traffic controllers, specialists who track down loose nuclear material wouldn’t get their paychecks. Investors around the world will ask if the United States of America is, in fact, a safe bet. Markets could go haywire. Interest rates would spike for anybody who borrows money — every homeowner with a mortgage, every student with a college loan, every small business owner who wants to grow and hire. It would be a self-inflicted wound on the economy. It would slow down our growth, might tip us into recession, and ironically, would probably increase our deficit.
What many people don’t understand is that raising the debt limit doesn’t increase government spending by one cent. It merely allows the president to pay for the spending that Congress already authorized by law. In fact, the president is legally obligated to spend the money Congress tells him to. This is why the president is refusing to negotiate on the debt ceiling. Congress racked up the bills (two wars and massive tax cuts all went on the national credit card), so now it’s time for Congress to pay those bills. And the only way they can do that is by raising the debt ceiling.
BOTTOM LINE: We don’t dine and dash and, as the president said today, “we are not a nation of deadbeats.” It’s time for Congress to do its job and pay the bills it racked up.
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