The only “faction” that controls whether to default, remains president of the United States.
Conservatives should be happy that Speaker John Boehner will agree to a short-term raising of the debt limit while insisting that President Barack Obama and the Democrats compromise over a continuing budget resolution to end the government shutdown.
Not because the former removes the specter of an actual “default”, but rather because it removes any plausible Democratic Party or media (but I repeat myself) allegation that a Republican refusal to raise the debt ceiling could be the cause of any downward market activity before or after the Obama Treasury Department-declared deadline of October 17.
Any Republican strategy to force Obama and the Democrats to compromise on Obamacare, taxes, spending or even the Keystone XL pipeline in a continuing budget resolution or bill to raise the debt ceiling inevitably leads to a Cruz-like government shutdown cul-de-sac.
Charles Krauthammer has known this since he worked for Vice President Walter Mondale in the late 1970s and when he watched President Reagan escape from government shutdown-showdowns with a Democratic congress unscathed in the 1980s.
For the past two weeks, as tea partier conservatives in congress led by Republican Senators Ted Cruz, Mike Lee and Marco Rubio have sought to de-fund Obamacare, we heard nary a word from any Fox News Special Report panel that the only “intelligent” course would obviously be to tie changes in the Affordable Care Act to a debt limit bill rather than a continuing budget resolution. No, we were told that Republicans “just can’t” win any battle that could lead to government shutdown because “Republicans don’t have the votes” in Congress and so can only hope to de-fund, repeal or amend the ACA by winning back the Senate in 2014 and the White House in 2016. Continue reading
President Obama’s blindness to government spending problem, and insistence on ever more tax increases on the rich towards always moving fair share-goalposts, makes refusal of the Republican House to raise the debt ceiling an acceptable option.
In the wake of the 2010 tea partier conservative epic GOP mid-term election landslide that returned control of the House of Representatives to the party, this columnist urged Republicans to risk a government shutdown during the 2010 budget negotiations as more palatable than risking “default” during the likely debt ceiling battle the following year.
Only President Barack Obama can cause the U.S. to default on its sovereign debt, and congressional Republicans must make this fact clear to the American people before the current debt ceiling is reached.
And only by owning the definition of “default” does the minority party in control of only one house of Congress have any chance of using the debt limit debate to rein in the Democrats’ out of control spending, spur job-producing economic growth and win the political argument going into the next election.
Of course, the Republican House of Representatives can, under Article I, section 8 of the U.S. Constitution, refuse to authorize the borrowing of any additional money on the credit of United States, and thus impose the balancing of spending with tax receipts, i.e. “the budget”. In that event, the Executive Branch would have at its disposal only tax receipts to spend on all “obligations” of the federal government based upon current law including entitlements and “discretionary” spending covered by the continuing budget resolution still in effect. But tax receipts only cover approximately two-thirds of current budgetary obligations, with the discretion to prioritizing expenditures in the President’s hands, absent a new law setting such priorities that both sides would have to agree to; and of course, that won’t happen.
Because all know that funds are, and will always be, available to pay interest on bondholder debts
President Obama’s default drop dead date pronouncements could precipitate a financial crisis that is unjustified based upon the actual funds available to pay interest on the debt.
The holders of U.S. Treasury bonds care about one thing: Being paid interest owed to them on time. They know that the U.S. Treasury receives approximately $200B in tax receipts each month and they know that debt service interest payments due each month are approximately $29B each month, or less than 15% of total cash on hand.
Further, these creditors know that there exists no “default” date, after which America would automatically and inevitably default on debts owed to them. So why would the Moody’s credit rating agency threaten to lower the supreme AAA credit rating that the United States of America has maintained throughout its history? Why would world financial markets go wobbly as Timothy Geithner’s faux August 2 default date approaches?
Could it be that Moody’s and the holders of T-Bills have lost confidence in the maturity and good judgment of President Barack Obama?
Surely they know that Obama and Geithner are proficient at basic arithmetic, Obama’s still-hidden Ivy League academic record and Geithner’s personal income tax transgressions notwithstanding. Yet, they hear the Chief Executive and his Administration playing a game of chicken with Republicans in Congress over, not just their debt service payments, but even refusals to guarantee payments Social security payments to the nation’s elderly, disabled and orphan survivors.
We know that there are, and always will be, for the foreseeable future, more than enough funds to pay monthly costs for:
Yet, this is the same administration that threatened not to pay the armed forces in the case of a government shutdown last Spring unless funds were restored to Planned Parenthood abortion mills.
Yes, everyone on Capitol Hill, at 1600 Pennsylvania Avenue and in foreign banks knows that there are no dates on, before or after August 2, 2011 when America will not have the money to pay its bills. But they also are beginning to suspect that the man responsible for actually writing the checks is willing to precipitate financial disaster on his own country merely for his own political purposes.
There are consequences to putting community organizers in charge of the nukes and our money. We the People are reaping the whirlwind of an ObamaDemRecession aftermath, already devastating for the unemployed, underemployed and small businesses whose customers have no money with which to buy their goods and services.
It can get worse and it appears that if Obama doesn’t get his way, he is willing to make it so. In fact, whether we had this debt ceiling issue or not, the fact of the huge debt we already owe could cause markets to dump American dollars any day. The laws of Nature have not been suspended.
But when you add to Nature’s laws an unnaturally irresponsible actor in the role of the most powerful man on Earth, prepare for the deluge.
I just hope that Congressional Republican leaders will begin to educate their constituents, especially including seniors, from whom the threat to their welfare and security comes: Barack Hussein Obama
Mike “gamecock” DeVine
Legal Editor – The Minority Report
Atlanta Law & Politics columnist for Examiner.com
“One man with courage makes a majority.” – Andrew Jackson
More DeVine Gamecock rooster crowings at Modern Conservative, Hillbilly Politics, Unified Patriots, Political Daily and Conservative Outlooks. All Charlotte Observer and Atlanta Journal-Constitution op-eds archived at Townhall.com.
Propose a 2012 balanced budget or lesser spending cuts that prevent the need for incurring debt that would exceed the current debt ceiling.
To advance anything less is to engage in a cynical game of chicken that betrays the trust conferred by the serious tea partiers that made the current GOP House majority.
Gamecock generally opposes games of “chicken”
For the record, this rooster opposed ever directly using the issue of the debt ceiling vote to achieve the massive spending cuts, envisioned by the recent wave election, needed to avert another financial crisis. We favored a selective shutdown of the federal government in the likely event that President Barack Obama and Senate Majority Leader Harry Reid (D-NV) would reject the will We the People concerning the 2011 non-budget.
We were confident that a contest between the rejected policies of ObamaDems and the desires of the voters. Our confidence was only raised when the Commander-in-Chief made a pre-emptive strike against the armed forces by promising not to pay them as “essential” workers in case of a shutdown and instead promised to violate the 13th Amendment’s prohibition against involuntary servitude by making them work without pay so that Planned non-Parent(abortion)hood can continue to use federal funds.
Sadly, Speaker John Boehner, half the newly elected tea partiers and enough Democrats saw to it that we would have to settle for millions in cuts, instead of billions (albeit a puny amount); but not to worry our heroes assured us, as they will be fighting for trillions over the 2012 Ryan budget.
Speaker Boehner may have best strategy on budget battle after all
Soon after the new GOP-majority House convened in January, this column endorsed endorsed a “selective government shutdown” strategy in which congressional Republicans would pre-emptively prepare the public for what seemed to us an inevitable confrontation over government spending with the new party of “no”, i.e. status quo Democrats.
Like Byron York, we think the political and economic landscape has shifted so dramatically since President Bill Clinton bested Speaker Newt Gingrich in the 1995 version of this play, that we fear no shutdown; and, like Hugh Hewitt, we think it best to confront the issue of deficit spending and debt in the context of our domestic affairs rather than debt ceiling vote bluffs.
A month later, we are more convinced that a shutdown is inevitable given President Barack Obama’s “Louis XV budget” head-in-the-sand proposal and especially after ObamaDems have been talking of nothing else but a shutdown. However, we have become convinced that it is not necessary to aggressively pursue such a strategy immediately for a number of reasons.