Debt Increase Must Be Offset By Cuts

by Don Azarias
July 1, 2012
Saying that he would draw “a line in the sand,” House Speaker John Boehner( R-Ohio), stood his ground on Capitol Hill by insisting that any increase in the debt limit should be offset by greater cuts in spending and tax reform before the end of the year, saying that working toward an agreement now would improve the economy. He said, “When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase. This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance.”
The “die is cast” as the House, with Speaker Boehner at the helm, is set on a collision course with the Obama administration.
President Barack Obama and his Democratic allies were quick to criticize the Speaker saying Boehner is employing the same tactics over raising the debt limit like he did last summer. We may recall that, last year, Boehner forced the Obama administration and congressional Democrats to agree to match a debt ceiling increase with spending cuts, after a showdown that almost led the federal government to default on its debts. The administration wants to sever the debt-limit issue from negotiations on taxes and spending to avoid the possibility of political gridlock and government default, the Wall Street Journal reported.
The Democratic-leaning New York Times got into the act and attacked Boehner’s vow calling it “extortion.” The Times editorial stated: “Washington’s need to deal with the long-term deficit can be met only with a combination of new revenues and rational cuts, not extortion. The overly deep cuts in last year’s deal were necessary only because Republicans refused to end tax cuts for the rich.”
I think the New York Times overdid its criticism of the Speaker of the House with the unfairness of its comment. How could it call Boehner’s stance “extortion” when he is only trying to be fiscally responsible by trying to block the Democrats’ attempt to increase the amount of the United States’ debt and deficit deemed unsustainable by mainstream economists and analysts?
Boehner maintained that work must begin on a larger agreement on the deficit and tax reform now, rather than waiting until the lame duck session after the election. “Why do we want to wait and rush this through at the end of the year, after the election?” Boehner asked. “It’s important that we actually do what the American people sent us here to do. Why do we always have to allow elections to get in the way of doing the right thing?”
Boehner said he isn’t “shy about leading” on the deficit debate, but acknowledged that he will have to get his own Republican House members on board, which he struggled to do during last summer’s debt ceiling debate. “Leaders need followers. And we’ve got 89 brand new members. We’ve got a pretty disparate caucus,” Boehner said. “And it is hard to keep 218 frogs in a wheelbarrow long enough to get a bill passed… But, you know, if we weren’t trying to do big things on behalf of our country, my job would be a lot easier.”
The debt ceiling allows the federal government to continue to pay its bills without the risk of default. At the end of the year the government will reach its $16.394 trillion borrowing limit. We may recall that, last year, Boehner forced the Obama administration and congressional Democrats to agree to match a debt ceiling increase with spending cuts, after a showdown that almost led the federal government to default on its debts.
White House spokesman Jay Carney said in response to Boehner’s threat: “We cannot hold the full faith and credit of the United States government hostage to one party’s political agenda.”
Boehner countered: “This is a line in the sand because Washington has kicked the can down the road, kicked the can down the road, kicked the can down the road, and the American people think we’re crazy.”
The debt limit debate will again create a stalemate between Democrats and Republicans on fiscal issues. Democrats want a mix of tax increases and spending cuts to reduce the deficit, while Republicans have called for spending cuts and overhauls of entitlement programs like Medicare.
The Obama administration vows that it won’t extend the Bush tax cuts next year for families making more than $250,000 a year, and many GOP legislators insist they won’t vote to raise taxes unless the Democrats make significant cuts in their unaffordable social service spending programs.
Presumptive Republican presidential nominee Mitt Romney, on a campaign stop in Iowa, had this to say to the voters: “I do not, for one moment, share my opponent’s belief that our spending problems can be solved with more taxes. You do not owe Washington a bigger share of your paycheck.”
Meanwhile, in a stunning statement, former President Bill Clinton said that the U.S. is already in a recession and urged Congress to extend all the tax cuts set to expire at the end of the year. It’s clearly the same position that Republicans had taken and it caught the Obama administration by surprise.
In a taped interview with CNBC’s “Closing Bell”, Clinton said that current economic conditions in the U.S. constituted a “recession” and said plans to cut the deficit threaten to sink the country further into debt. “What I think we need to do is find some way to avoid the fiscal cliff, to avoid doing anything that would contract the economy now, and then deal with what’s necessary in the long term debt-reduction plans as soon as they can, which presumably would be after the election. That’s probably the best thing to do right now. But the Republicans don’t want to do that unless [President Barack Obama] agrees to extend the tax cuts permanently, including for upper-income people—-and I don’t think the president should do that.”
For one fleeting moment, I thought Bill Clinton had changed his party affiliation and is now a Republican. It’s apparent that he doesn’t believe in the Obama administration’s position on this issue.
To the American voters, I have this question to ask: “Setting aside political affiliation, which political party would you say is more fiscally responsible, Democrat or Republican?”
It’s a question that will be in your mind when you go to the polls come November 6, 2012. This is really what this presidential election is all about. Be sure you make the right choice for the good of the United States and our children’s children.