Sunday, April 17, 2011

Raising the Debt Ceiling

Now that President Obama needs votes to raise the debt ceiling, he wants Republicans to believe he gets it - that he understands he must accept deep spending cuts to get our economic growth moving in the right direction. In 2006 he voted against raising the debt ceiling - as did his other fellow Democrats - because they wanted to score political points against then President Bush. Last week, President Obama's press secretary had to admit it was the wrong vote to make then and it would be wrong for politicians to vote along those lines now.

Funny the difference just a few years can make when it comes to political morality. That was then, this is now seems to be the theme. The debt has gone up 35% since he assumed the presidency and he has been dragged kicking and screaming into serious discussions on spending reductions now. Some are planning to align a vote on raising the debt ceiling with spending cuts.

Even President Obama admits that spending cuts must be a part of raising the debt ceiling vote. “I think it’s absolutely right that it’s not going to happen without some spending cuts,” the president told The Associated Press in an interview in his hometown, agreeing with House Speaker John Boehner’s assessment.

Obama, however, is still in denial as to the urgent need to put spending cuts into place. He is hoping to kick that can down the road until he is re-elected in 2012. Then he can do as he wants, as he did in the great spending sprees of 2009 and 2010. He warned of dire consequences if the debt ceiling is not raised before it hits its limit of $14.3 trillion in mid-May. But he said some questions about where the government trims its operations will have to be left until after the 2012 presidential election

There is really no doubt in the mind of anyone that the debt ceiling will be raised. The question now is how firm the Republican leadership will be in the negotiations leading up to the vote. This is the time to push hard for real reforms put forth and this is the time for demanding a balanced budget amendment.

The most strident of the fiscal conservatives, the Tea Party coalition, looks at the opportunity to push for a balanced budget amendment with stronger spending controls.

However, legislators favored by the conservative Tea Party movement said their support for raising the debt ceiling would require accompanying changes in how the government operates in order to hold down future spending. Rep. Allen West, R-Florida, proposed a balanced budget amendment, caps on government spending limits and a trigger mechanism that requires spending cuts if the budget deficit gets too big. "If you're going to ask this Congress to raise the debt ceiling, there's got to be something structural on the spending side," added Rep. Joe Walsh, R-Illinois, on ABC.

A balanced budget amendment was pressed upon former President Clinton when he had to work with a GOP controlled House and Senate. With that and the welfare reform, also demanded by Congress then, economic prosperity prevailed.

At the end of March, Sen Cornyn (R-TX), spoke to the desire of the Senate Republicans for the balanced budget amendment. “My hope is that we would force a vote on a Balanced Budget Amendment as a condition to voting on the debt ceiling,” Sen. John Cornyn (R.-Tex.) told HUMAN EVENTS. “By next week, or shortly thereafter, we will have all 47 Republicans unified behind the effort, and then begin to reach out to our Democratic colleagues.”

A BBA would force the federal government to balance the federal spending to incoming revenue each year and cap spending at 18% of the gross domestic product (GDP). For the current Fiscal Year (FY 2011), the nonpartisan Congressional Budget Office (CBO) projects that government spending will be $1.4 trillion more than revenue and account for almost 25% of the GDP.

Now is the time for strong negotiations led by GOP leadership in Congress.

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