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    Monday, July 18, 2011

    Debt Ceiling: Don't Call His Bluff, or Grandma Eats Dogfood!

    If you live under a rock, we're a couple of weeks away from supposedly hitting the limit on the nation's credit cards.  Once you get past the stupidity of the debtors debating with each other over how much to raise their own credit limit, we have to face the reality that the limit will probably be increased.

    When you're facing a deficit of $2T, it's going to be pretty hard to cut all that out immediately, and we already know that the Dems have promised that if the limit isn't raised, they don't intend to pay anyone and just let the country go into default.  That's what Obama meant when he said Granny wouldn't get her social security check.  Why would admit he could service the debt and pay social security obligations?  That would be truthful, and we already know the truth and Obama are alien.  Plus, it would demonstrate real leadership and responsibility.  It is what YOU would do, since YOU are responsible.  But, that's not in the Dems DNA.  No, like any other crisis, why let this one go to waste. There are political points to be made!

    Obama famously dared Eric Cantor and the GOP "Don't call my bluff," and it's unlikely that they will.  But, is there another way to protect the nation's credit rating, and still force the administration to accept cuts in the budget?  Is there a way to "call his bluff" and retain the nation's good credit?

    The GOP is going to vote this week on a plan they label as "Cut, Cap, and Balance, " or CCB.  The plan cuts spending, places a cap on spending as a percentage of GDP, and takes a vote on a balanced budget amendment (BBA).

    The cut part is intended to at least offer a dollar for dollar cut in spending for a corresponding increase in the debt limit.  That would address the immediate need to keep the US out of default and run the country as usual (or, at least as Obama and the Dems define usual).

    The cap part limits spending, as proposed, to 18% of GDP.  This is below the historical norm (around 20%) and takes us back many years, so it really does represent a return to a more fiscally sane time.  But, except for now, and WW2, we've never spent much more than 21% of GDP (today, it's 24%), so this is close to historical levels.

    The balance part is a balanced budget amendment, which does not require the president's signature to send to the states.  It is the hardest part of the thing, requiring a 2/3's vote in both chambers.

    Dems being huge spenders, none of these, sadly, has a chance of passing the Senate, with it's 51 Dem majority (and Independents Bernie Sanders and Joe Lieberman).  So, yes, CCB is largely political posturing, but, it lays out the GOP's goals and what is acceptable to the GOP, and, I might add, to the people who sent historic numbers of them to Congress in the 2010 election.  Taking Obama at his word that elections have consequences, I'd like to point out to the Liberals that the most recent election, and the one that most closely tells you where the country is on this, was in 2010, and "We won."

    The GOP leadership seems torn by what to do.  Of course, the old GOP guard of RINO's like Mitch McConnell and John McCain remember 1995 and that shutdown, and they know how they got outmaneuvered by Bill Clinton and a "pliant, supine media." They cringe at what this means to them, if Obama and his pals in the mainslurp media succeed in framing a failure to reach an agreement as the GOP's fault.  To them, I warn that this is NOT 1995.  There was no Fox News and no Internet to speak of in 1995. The state-controlled media was much stronger then, and Barack Obama is no Bill Clinton, although they share being first black presidents.

    I further warn the GOP Old Guard that the Tea Partiers and their sympathizers (me), will not take kindly to more Republican capitulation to those determined to ruin the United States of America.  If you're not aware of the McConnell plan, while it seems politically palatable, it is NOT what we sent this crop of people to Washington to do.  We sent these people to Washington to save us from the left-wing ideologue in the White House, and we intend for them to do that.  At least we want them to hold the line until help arrives.  This battle is crucial in framing the debate for 2012, and Barack Obama and the do-nothing, Dem-controlled Senate must be made to pay for their intransigence in this one.

    Understanding that the Senate will not pass CCB, and that even if it miraculously passed, BO would veto it, what is the GOP to do?  Keep in mind that even if August 2nd comes and there is no debt limit increase, the Feds are still collecting revenue, something like $200B/month.  So, there's money coming in.

    Dick Morris, a veteran of that 1995 battle (on the winning side), has some advice for Republicans.  Dick says, pass CCB, to get your policy goals out there and put it on record, but that's only 1/2 the battle.  Knowing that won't pass, pass legislation that gives the administration Congress's priorities in the event there is no debt limit increase.  Tell the president what you expect him to do with that $200B.  And it should be:

    1. Service the debt to avoid default.  This must be priority one.  Codify it so that the rating agencies and creditors know we intend to make good on our debts.
    2. Direct the president to pay active duty military salaries and fund contingency operations (those are called wars in another administration).
    3. Direct the president to make social security payments and Medicare and Medicaid payments.
    4. Authorize the Treasury Secretary to borrow money as necessary beyond the debt limit to make good on any of the above bills, should revenue be insufficient.  
    5. Require Treasury to provide a full accounting of where all revenues are spent.
    From most estimates, the money coming in should be enough to cover these obligations.  But, even if not, the conditional approval to borrow will ensure they are met.

    It shouldn't take legislation to make these things happen.  A true leader of the free world would already have assured people that even though the Congress is a bunch of louts and can't increase the debt limit (or, in the case of the Senate, pass a budget), he would ensure all these things would happen, because, you know, he's a leader.  Instead, this president decided to be a demagogue and use granny to score political points. Hey, we already knew that about him, though.

    Parts of the government will go in to hiatus.  Unlike 1995, though, this time, no one will care, especially since the President and his pals have made Social Security and the military the issue already, now they'd have to back off and say, well, we got that covered, but aren't you mad the EPA isn't enforcing environmental regulations, or that Joe Biden can't take the Acela home to Delaware this weekend?  

    I'll take that argument.

    Look, if not now, when?  If conservatives lose this debate, then, I agree with Sean Hannity, who today said that means the country has decided we want to be Greece.  If that's what the majority of Americans want, then I'll stick around to pick up the pieces.  We'll all find out who John Galt is.

    1 comment:

    Dean_L said...

    I like the Dick Morris' 5 point constraints but I'm not sure I'm cool with point #4. That's the same thing as saying there really isn't a debt ceiling.

    I think it risks opening up room to transfer monies around and then to comply with #4, borrow more money above the debt limit. I don't think #5 is tight enough of a point to constrain #4.

    That aside, I think the provision to comply with points #1 through #3 should be to find the funds elsewhere within the current spending.

    Just a concern, not a general dislike of his ideas, or your great post.