Vote 'No' On Raising the Federal Debt Ceiling

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The Ralph Rant

A new Congress has gone to work and if it does its job, members will soon find themselves on a collision course with President Obama over cutting spending. I'll be surprised and delighted if they can reach an agreement with the President on a plan to contain spending in a meaningful way before it's time to vote on whether to raise the federal debt ceiling.

More Republican lawmakers are vowing not to vote to raise the debt limit unless there is a plan in place for shrinking the explosive entitlement spending and for returning to 2008 discretionary spending levels. A majority of the House, at the least, needs to take a principled, bold stand on the debt ceiling – and not be bluffing.

On Wednesday, Fox News Business contributor Stuart Varney opined in an interview with me that the debt ceiling was “strong leverage” for Republicans to use to force serious action on spending. Without breaking stride, Varney said he was virtually certain Republicans will not actually vote against raising the ceiling because (1) it would cause an economic catastrophe and (2) they would suffer politically if it does.

I advised Mr. Varney that he contradicted himself with the two statements. If everyone believes the Republicans are bluffing, they have no leverage at all. They should not be bluffing. They should not be playing “chicken” on the issue of the debt ceiling. They should be prepared to NOT raise the ceiling.

A critical showdown could come as early as March with the debt ceiling at $14.3 trillion, and the debt just passing $14 trillion on Tuesday this week. Ironically, the tax cut package that President Obama and Republican leaders negotiated at the end of last year pushed the government about three weeks closer to the debt limit, according to Fox Business.

I reject the notion that a failure to raise the ceiling would trigger an economic catastrophe. It need not. The President only needs to tell the world that we are going to cut spending as much as necessary to avoid the need to borrow more – at least until a plan is in place to put us on a sound fiscal path. He should say that it will not affect our ability to service our debt – only that we will not be taking on more debt, at least for now. He should also assure the world that the U.S. will continue to fully fund our national defense needs, and that all emergency spending cuts will come from the domestic side of the budget.

There is nothing even slightly resembling catastrophic about cutting spending to match the large, steady revenue stream into the U.S. Treasury through individual income, payroll, gasoline, and other taxes. We will prioritize our bill-paying and eliminate costs that are not critical, but under no circumstances will we stop any payments to bond-holders or the military – even as we discontinue issuing more debt.

President Obama, through economic advisor Austin Goolsbee, said on Sunday that a refusal to increase the government's debt ceiling would be “catastrophic” and a sign of “insanity.” However, in 2006, Senator Obama voted against increasing the ceiling, saying "the fact that we are here today to debate raising America's debt limit is a sign of leadership failure.”  Either he doesn't believe what he is saying now, or he believes he was “insane” in 2006.  Only Obama knows for sure whether he would have voted against raising the ceiling in 2006 had his vote been the one that decided the issue. Maybe someone should ask him.

In the meantime, we should ask the question of Republicans who are saying basically the same thing now. What if all the other votes were cast, yours was the last one, and it would decide the issue. If there is no plan in place to put us on a path of fiscal responsibility, would you vote “yes” or “no” on raising the debt ceiling? 

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