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The Republican Truth Deficit on the Debt Ceiling

April 23, 2011

With the deadline on raising the $14.3 trillion U.S. debt ceiling fast approaching, grandstanding Republicans are threatening national economic suicide. If it comes, the means of death will have been a fatal dose of hypocrisy. After all, GOP majorities in Congress didn't merely vote seven times to boost the ceiling - and double the national debt - during George W. Bush's tenure in the White House. Just one week ago, 235 House Republicans voted for Paul Ryan's 2012 budget which would add $6 trillion in new debt over the next decade. All of which means the U.S. will repeatedly have to increase the debt ceiling for years to come.
Of course, you'd never know that based on the incendiary rhetoric from the leading lights of the Republican Party and their right-wing echo chamber. Senator Rand Paul (R-KY) said his vote to bump up the debt ceiling would come at the cost of a balanced budget amendment to the Constitution, "the last time we're doing it." His South Carolina colleague Jim Demint threatened to filibuster the increase, even if it meant the GOP's "Waterloo." For his part, House Budget Committee Chairman Paul Ryan insisted, "We won't raise, just simply raise, the debt limit," adding, "We will vote to have spending cuts and controls in conjunction with the debt limit increase." The number two House Republican Eric Cantor (R-VA) regurgitated that line, telling Democrats the GOP "will not grant their request for a debt limit increase" without major spending cuts or budget process reforms."
With a new CBS poll showing Americans by a 2-1 margin oppose a jump in the debt ceiling, giddy right-wing bloggers demanded fidelity to a scorched-earth strategy. As Patterico put it:

If Republicans are going to vote to raise the debt ceiling -- and not to do so will indeed cause financial chaos -- they have to extract concessions sufficient that they can credibly say: this is the last such vote we will ever have to have. These concessions prove it.
Decide what concessions are important, demand them, and stick to your demand. Don't fold when you have all the cards.
Just say: we want this to be the last time we ever raise this ceiling. The Democrats want to raise it forever.
Then say it again. And again. And again.
And don't let them blame you. Every time they accuse you of wanting to ruin us financially, point out that they have the power to agree to your reasonable demands -- which, if they are not met, simply means we will be back in the same position in six months or so. Because, after all: we want this to be the last time we ever raise this ceiling.

If so, Republicans and their bath water drinkers may want to take a second look at the Ryan budget all but four GOP House members just voted for.
As the Washington Post's Ezra Klein explained:

It doesn't matter which budget plan you're looking at: our accumulation of debt might slow in the coming years, but it doesn't stop. Obama's budget requires another $7 trillion in borrowing over the next decade. Paul Ryan's budget requires $6 trillion. The Simpson-Bowles recommendations would require about $5 trillion.

The Ryan budget, which guts Medicaid, ends Medicare and delivers $4 trillion in tax cuts (including $1 trillion in yet another windfall for the wealthy), itself fails to cross the ever-moving Republican goal line. Ezra Klein summed up the GOP duplicity bordering on psychosis:

House Republicans voted to make the Ryan budget law. But the Ryan budget includes $6 trillion in new debt over the next 10 years, which means that to become law, the Ryan budget would require a substantial increase in the debt ceiling. But before the Republicans agree to increase the debt ceiling so that the budget they passed can become law, Republicans are demanding the passage of either a balanced budget amendment that would make the Ryan budget unconstitutional or a spending cap that the Ryan budget would, in certain years (and if you're using more realistic numbers, in all years), exceed.
The point? Republicans have done a lot more thinking about how to run against spending, debt and deficits than thinking about how to handle them going forward. The specific plan they voted for blows through both their spending and debt caps, and that's if you grant a series of assumptions it makes about health-care spending that even conservative wonks agree are "magical." You simply can't run the government under the sorts of targets Republicans are endorsing, and if you look at their budget, you'll realize that some of them, at least, know that.

It's no wonder Klein's Washington Post colleague Matt Miller deemed the Republican budgetary horror story "The Shining - National Debt Edition."
It should also come as no surprise that some Republicans are pretending that with a little budgetary sleight of hand, the cataclysm that would be a U.S. default need not be so, well, cataclysmic. Pennsylvania Senator Pat Toomey criticized Treasury Secretary Tim Geithner for "doomsday predictions that could only materialize at his own hand." Instead, Toomey claims, the Obama administration should back his bill which "would require the Treasury to prioritize payments on our debt in the event the debt ceiling is not raised, thus ensuring the U.S. government does not default." White House hopeful Michele Bachmann (R-MN) similarly declared we don't raise the debt ceiling, but we use the revenue still coming in to pay off creditors first and whatever we think most important second. That way, we "don't violate our credit rating" and "prioritize our spending."
In response, Ezra Klein described Bachmann's fantasy as "the scariest thing I've ever heard on television."

It makes perfect sense unless you, like me, had spent the previous few days talking to economists, investors and economic policymakers about what could happen if we start playing games with the debt ceiling. Their answers were across-the-board apocalyptic. If the U.S. government is so incapable of solving its political problems that it can't come to an agreement on the debt ceiling, they said, that's basically the end of the United States as the world's reserve currency. We won't be considered safe enough to serve as the investment of last resort. We would lose the most important advantage our economy has in the global financial system -- and we'd probably lose it forever. Skyrocketing interest rates would slow our economy and, in real terms, make it even harder to pay back our debt, which would in turn send interest rates going even higher. It's an economic death spiral we associate with third-world countries, not with the United States.

(For a terrifying look at the worst case scenario should the GOP succeed in forcing a default by the U.S., see Annie Lowrey in Slate.)
The Republican truth deficit on the debt ceiling hardly ends there. As Howard Gleckman pointed out, "any lawmaker who voted for the budget deal that funds the remainder of this fiscal year or who opposed the measure because it cut spending by too much ought to be impeached if he does not also vote to increase the debt limit." And as the Post's Klein again pointed out, the Ryan plan fails every GOP balanced budget amendment proposal and all Republican schemes to cap spending at 18% or 21% of American gross domestic product (GDP).
Sadly, as the CBS polling data reveal, Republicans have thus far succeeded in persuading Americans that there are no consequences to defaulting on the national debt. 63% of all respondents and 83% of Republicans oppose raising the debt ceiling. Even if, as is the case, the Republican budget would require it and failure to do so would result in economic ruin. Any claim to contrary is not to intended to be a factual statement.


About

Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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