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"It's true that allowing America to default would be irresponsible," House Speaker John Boehner (R-OH) told the New York Economic Club this week. "But it would be more irresponsible to raise the debt ceiling without simultaneously taking dramatic steps to reduce spending and reform the budget process." Could it be that Boehner has drawn a line in the sand over increasing the debt limit and that Republicans will rally to the cause? Yeah, it'd be nice, but we're not betting on it.
The speaker certainly appeared to be serious. "To increase the debt limit without simultaneously addressing the drivers of our debt ... would be monumentally arrogant and massively irresponsible," he warned. "It would send a signal to investors and entrepreneurs everywhere that America still is not serious about dealing with our spending addiction. It would erode confidence in our economy and reduce certainty for small businesses, and this would destroy even more American jobs."
He became more specific when he said, "Without significant spending cuts and reforms to reduce our debt, there will be no debt limit increase, and the cuts should be greater than the accompanying increase in debt authority the president is given. We should be talking about cuts of trillions, not just billions." To cut that much, reforming Medicare, Medicaid and even Social Security would be unavoidable. The last debt ceiling increase was $1.9 trillion, and the administration is asking for another $2 trillion increase to the current $14.294 trillion limit. The administration, of course, wants no conditions attached.
Some Republicans are proposing smaller, incremental increases if the administration or the Senate blocks such dramatic cuts (recall the bitter histrionics over that paltry $38 billion in budget "cuts" last month -- cuts that ultimately ended up being closer to $352 million). Numerous votes on the debt ceiling would probably cause heartburn for many Tea Party congressmen and in reality, such a plan won't work with the weak-kneed general Republican caucus. On the other hand, keeping the issue in front of voters should hurt Democrats even more. If Barack Obama chooses to stake his 2012 campaign on continuing the spending binge, he's welcome to it.
Obama will continue to push for tax increases -- or as he euphemistically put it, "spending reductions in the tax code." However, Boehner is having none of it: "If we're serious about balancing the budget and getting our economy back to creating jobs," he said, "tax hikes should be off the table." Should? As we've said before, our nation has a spending problem, not a revenue problem.
At present, there are outstanding plans on the table to fix the budget, including the Republican Study Committee Budget for FY 2012 and Heritage Foundation's comprehensive plan to restore prosperity.
Of course, all this comes on the heels of news this week that the Treasury Department auctioned $72 billion in new debt, which is enough to push the U.S. over the debt limit. According to the Treasury, accounting gimmicks will push back the deadline to Aug. 2, but something must be done. Soon.
"I have received two polls that indicate either 57% or 58% of "registered voters" and "likely voters" now associate themselves with the Tea Party. Both are unweighted and contain fiscal and social questions. It appears many now realize that if our fiscal ship sinks, our social programs go down with it!"