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One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors. -- Plato (429-347 BC)

Tuesday, May 31, 2011

People's House Rejects Raising Debt Ceiling Without Real Spending Cuts

by Gary Varvel
Even though the Obama White House has pushed for raising the debt ceiling, today, the House overwhelmingly voted 318 to 97 against raising the limit. Almost half the Democrats and all of the Republicans voted NO! 7 Democrats voting "present." TEA Party Patriots are calling the vote "significant." However a Reuter's reporter is calling the vote "symbolic."

The US Government hit its debt ceiling on May 16 ($14.3 Trillion). That does not mean the government must stop operating but it does mean no more borrowing from foreign countries. Treasury Secretary Tim Geithner has other means of borrowing which does not count against the debt ceiling and has said he can keep the U.S. until August 2nd.

President Obama said he wanted a vote on the debt ceiling and he got it. Senate Democrat leaders wanted their members to vote for the increase but the Demcrat members knew the wishes of their voters. They also knew that a required 2/3 vote was required to pass this bill. So it remains unknown without their public statements why the voted no -- was it playing politics because they knew the bill would not pass with the Republicans holding form or were they also concerned about the National debt.

The key will be in future votes, when they are required to make cuts in spending to get the Republicans to vote yes on raising the debt ceiling. The Washington Post reports: "The vote came one day before the entire House GOP caucus is due to meet with Obama at the White House, the first such meeting since Republicans seized control of the House in the midterm elections last fall. Carney said Obama plans to listen to their concerns but will also underscore their duty to the nation by citing a letter that President Ronald Reagan sent to Capitol Hill demanding a debt limit increase in 1983." WPO added, "Meanwhile, debt-reduction talks between the White House and congressional leaders are already underway, led by Vice President Biden. Last week, Biden said the group is on track to produce an agreement that would trim at least $1 trillion from projected budget deficits over the next 10 to 12 years. That would be the biggest debt-reduction package since at least the start of the Clinton administration, when a Democratic Congress approved spending cuts and tax increases estimated to reduce deficits by $433 billion over five years."

Rep. Rick Crawford (R-AR-01) said, "It is time for both parties to address how Washington spends taxpayer dollars,” said Congressman Rick Crawford. “I will not consider a vote to raise the debt ceiling unless we enact structural spending reforms to ensure we are not put in this position again. For decades, both parties voted to raise the debt ceiling unconditionally without a sense of consequence. It is time we change how Washington does business. Addressing our debt crisis by simply adding more debt is not the solution. I will not consider a vote to increase the debt ceiling unless we enact permanent structural reforms."

Rep. Tim Griffin (R-AR-02) said, “Tonight, I voted ‘No’ to raising the national debt limit and will remain opposed to raising it without serious structural spending reform. Neither the President nor Senator Reid has a plan to deal with the federal government’s out-of-control spending, but the House does. They should adopt the House’s reforms to save Medicare, reduce spending and encourage private-sector job creation. I understand the gravity of what is at stake and addressing the root cause of the debt—out-of-control spending—is the only way forward.”

Rep. Steve Womack (R-AR-03) said, "“I have said all along that the fiscal situation facing our nation is among our highest priorities in Congress. It is unconscionable to consider an increase in the debt ceiling without significant and guaranteed limits on federal spending. We cannot continue to add to the burden of future generations by ignoring our obligation to control spending.”

Rep. Mike Ross (D-AR-04) said, “I voted against raising the nation’s debt ceiling today because we’ve got to send a strong message that it’s past time to stop the out-of-control spending in Washington. Before I can support any increase in the debt ceiling, it must include meaningful spending cuts that will actually reduce our deficits without punishing America’s working families and seniors."

Key Facts on the U.S. Debt Limit
  • The Debt limit was last raised in early February 2010
    - Senate vote: 60-39 (Late January)
    - House vote: 27-212 (Early February)
  • To avoid default, Congress must pay $207 billion in debt interest.
    - Federal revenue: $2.2 trillion
    - Federal spending: $3.3 trillion ($1.1 trillion more than revenue)
FY11 can be fully funded without raising the debt ceiling.
  • Congress shouldn’t be rushed or bullied into raising the debt limit.
  • No one is asking the US to default on its debt.
  • All that is needed to avoid a default is to make payments on the interest.
  • The Treasury is able to delay a default date by selling assets, shifting cash around, and borrowing money from the Fed that does not count to the debt ceiling.
Historical Context
  • Congress has never failed to increase the debt limit.
  • In the last 10 years, the debt ceiling has been raised 10 times.
  • Since 1940, the debt limit has been raised 100 times.
  • Geithner has changed the default date 4 times in 2011 alone, the latest projection being August 2.[1]
Institutional reform is needed to fix a broken system.

  • The debt ceiling does not effectively restrain spending, yet is simply raised at Washington’s whim, at a historic average of 1.5 times per year.
Cutting spending is not something to be delayed.

In the end, we are at greater risk to default under Washington’s charge card and excessive spending.
  • American families cannot just increase their credit limit when their credit card debts become too burdensom, and Congress should not either.
  • Excessive government spending has economic consequences for all Americans: higher cost of living, higher interest rates, and higher taxes.
  • Interest and mandatory spending, such as Social Security and Medicare, will consume 90 percent of the budget by 2020; leaving 10% for everything from defense to education and infrastructure.
  • Our heavy debt load is a bipartisan issue; spending doubled under President George W. Bush and is expected to double again under President Obama.
  • We have seen Washington come together to make significant cuts to spending. The debt ceiling must be handled with the same sobriety and focus.

Tags: National, U.S. Debt Limit, US House, vote, debt facts To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. Thanks!
Posted by Bill Smith at 7:41 PM - Post Link


Anonymous Robert Trig Ashby said...


Anonymous Pamela Hatch Manard said...

It's very nice to get good news out of Washington! Yay!!! for the Reps in the House - Good job :)

Anonymous Joanne Filiatreau said...

Great article Bill, Thank you!!


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