GOP Marks 10 Years since Giving Bush Clean Debt Ceiling Hike
This week, Treasury Secretary Jacob Lew warned Congressional leaders that the federal government will hit its debt ceiling in late February. But just days after House Speaker John Boehner declared Uncle Sam "shouldn't even get close" to the edge of its borrowing limit, his spokesman Michael Steel warned a "'clean' debt-limit increase simply won't pass in the House." After a year in which Republicans' ever-changing blackmail for not triggering what they deemed "financial collapse and calamity throughout the world" included repealing Obamacare, adopting the House GOP budget, implementing tax reform, green-lighting the Keystone XL pipeline, curbing new federal regulations and even enacting draconian new abortion restrictions, House Budget Chairman Paul Ryan on Thursday issued a new ransom note.
The extortion this time, Ryan suggested, would be the repeal of "risk corridors" in the Affordable Care Act, provisions designed to help keep premiums down while protecting health insurers if their newly covered customers generate higher-than-expected costs, would be the GOP's price for lifting the nation's borrowing cap. As Politico reported:
"There are issues with Obamacare," Ryan said. "A lot of folks don't realize there could be some massive insurance company bailouts in the near future with Obamacare that a lot of taxpayers probably didn't know about that we don't want to see happen. That's one of the issues that's in the realm of possibility. There are a lot of things...that are being discussed but it's just not in our interest to negotiate in the media."
Ryan's position on these mythical "bailouts," echoed by Republican Study Committee chairman Steve Scalise (R-LA), is more than a little ironic. After all, President Bush's Medicare Part D prescription drug plan overwhelmingly supported by Congressional Republicans in 2003 contains virtually the same risk corridors as the Affordable Care Act. As it turns out, 10 years ago House and Senate Republicans gave President Bush a "clean" no-strings-attached $800 billion debt ceiling increase, one of seven they granted as he almost the doubled the national debt during his tenure. And the current GOP leadership team of John Boehner, Paul Ryan, Eric Cantor, Mitch McConnell and John Cornyn voted for all of it.
If the current Republican story line sounds familiar, it should. As House Republicans shut down the government last fall and once again brought the U.S. to the brink of default, Speaker Boehner warned Obama in October:
"We're not going to pass a clean debt-limit increase."
"I told the president, 'There's no way we're going to pass one.' The votes are not in the House to pass a clean debt limit. And the president is risking default by not having a conversation with us."
Unless, that is, the president involved is a Republican.
As it turns out, a clean debt ceiling bill exactly what then House Speaker Dennis Hastert and future Speaker John Boehner gave Republican President George W. Bush in November 2004. That October, Bush called for his fourth hike in the nation's borrowing authority. His Treasury Secretary John Snow warned, "Given current projections, it is imperative that the Congress take action to increase the debt limit by mid-November," adding that his arsenal of fiscal tools, including tapping money intended for the civil service retirement fund, "will be exhausted."
Boehner's predecessor made it clear that President Bush had nothing to worry about. As the Washington Post recounted that October:
"Typically with Congress, they do it when they need to do it," said John Feehery, spokesman for House Speaker J. Dennis Hastert (R-Ill.). "And we'll do it when we need to do it."
And do it they did. But as the New York Times explained on November 17, 2004, Bush had to wait for his debt ceiling increase for a very simple reason:
Faced with the prospect of a government unable to pay its bills, the Senate voted on Wednesday to raise the federal debt limit by $800 billion.
Though an increase in the debt ceiling was never in doubt, Republican leaders in both houses of Congress postponed action on it last month, until after the elections, to deprive Democrats of a chance to accuse them of fiscal irresponsibility.
The ironies in that 2004 debt limit expansion didn't end there. Democrats rightly "noted that Bush's 2001 budget anticipated the debt ceiling would not have to be raised until 2008." By the time Bush left office in January 2009, the U.S. national debt had nearly doubled. And as it turned out, As it turned out, John Boehner, Mitch McConnell, Eric Cantor along with Speaker Hastert and Senate Majority Leader Bill Frist needed to enable President Bush to borrow more money to pay for a massive new health care program.
That's because on top of two wars, two rounds of tax cuts and the TARP program to come, they added another budget-buster to Bush's ledger in December 2003, the Medicare prescription drug benefit. And, as I noted previously, it was a doozy:
Within two months of signing the Medicare Modernization Act (MMA) into law, President Bush quietly informed Congress that the true cost of the program would be $550 billion, not $395 billion, over the next decade. When Medicare actuary Richard Foster sought to present the true price tag to Congress in late 2003, then agency chief Thomas Scully threatened to fire him. By the time the program was launched in 2006, the estimated 10 year price tag for the Medicare prescription plan had increased to $720 billion.
Ultimately, the costs of the initially unpopular Part D program came in closer to the original forecast. But as Ezra Klein detailed, that was primarily due to the greater use of generic drugs and the lower rate (77 percent versus 93 percent) of enrollment by America's 43 million Medicare recipients. Regardless, Bush, Boehner and company never raised a single penny of new revenue to fund a program that needlessly enriched private insurers and pharmaceutical firms at Uncle Sam's expense. Unlike the fully-funded Affordable Care Act now, it all went on America's credit card.
As Senator Orrin Hatch acknowledged in 2009:
"It was standard practice not to pay for things."
It has also been standard practice to raise the debt ceiling, something both parties have routinely done a combined 42 times since 1980. With the dramatic improvement in the near-and-mid-term debt forecast and the federal government's annual deficits plummeting to half the level Barack Obama inherited when he first took the oath of office in January 2009, there is no reason to attach any conditions to a debt ceiling hike.
Especially when those conditions are the ones described by Rep. Scalise:
"When the debt ceiling is hit, I think that's an opportune time to also talk about making the reforms to control spending. What we've been looking at recently...is this high risk corridor."
As Jonathan Cohn explained, Scalise and his fellow Republicans might want to think twice about that:
The reinsurance and risk corridors in Obamacare and Medicare Part D are remarkably similar, except that Obamacare's are temporary and Medicare Part D's are permanent--which is to say, they are still part of the program.
(For details on just how similar, see "Republicans Support 'Bailout' for Private Medicare Insurers.")
And so it goes. Ten years ago, Republican majorities in the House and Senate gave President Bush a clean debt ceiling increase to help pay for his new health care program, risk corridors and all. But that was then and this is now.
And now, a Democrat is in the Oval Office.
(This piece first appeared at Dailykos.)