Republicans on Capitol Hill, having agreed to tax increases on those making more than $450,000, are now asking for a deficit plan that focuses exclusively on spending cuts. On “This Week,” with George Stephanopolous, Senate Republican Leader Mitch McConnell said,
“The tax issue is finished. Over. Completed. That’s behind us. Now the question is what are we going to do about the biggest problem confronting our country and that’s our spending addiction. We didn’t have this problem because we weren’t taxing enough.”
Republicans have been saying this over and over. It’s worth noting, however, that Senator Lindsey Graham (R-S.C.) said back in November that it was fair to put revenue increases on the table because the country was below historical averages when it came to revenue. Of course, his and other Republicans’ version of raising revenues included closing certain loopholes and capping certain deductions, which they said would mostly affect higher-income people.
Jonathan Cohn’s Jan. 6 piece in The New Republic says that McConnell’s statement about the tax debate being over means that Congressional Republicans plan on, once again, holding the debt ceiling hostage as a way to get what they want. Republicans now want exclusive spending cuts with no more discussion about tax hikes, not even through eliminating loopholes and capping deductions.
This may resonate more strongly with people now than before, because the Taxpayer Relief Act did raise taxes on the wealthy. Rep. Dave Camp (R-Mich.) says that Democrats have not been willing to put forth ideas for real spending cuts, implying that all they want is deficit reduction through tax increases. This isn’t true. President Obama has put forth ideas for spending cuts since the election, including a proposal that was rejected by House Speaker John Boehner.
Thus, making the claim that the President isn’t serious about spending cuts and is entirely on the side of raising revenue, is, at best, disingenuous. It seems that if a proposal doesn’t contain every last detail they want, Republicans will reject the whole thing out of hand and then claim that nobody’s serious about spending cuts. If cuts are necessary, some are better than none, and could be built upon later, once their full consequences are known.
Holding the debt ceiling hostage is another thing Republicans have done before, refusing to raise it unless they get exactly what they want when it comes to the budget. It resulted in the first-ever credit downgrade in U.S. history in July 2011.
Just for a little understanding, the debt ceiling is Congressional authorization for the Treasury to continue paying its obligations. This is why the U.S. will default on its loans if the debt ceiling isn’t raised. According to Jamelle Bouie of The American Prospect, playing with the debt ceiling won’t do anything to lower deficits. Instead, it means that federal employees don’t get paid on time, Social Security and Medicare payments don’t go out, bondholders don’t get their payments, and neither does anybody else the government promised to pay. It’s why the government would default on its loans.
This, he says, can cause financial markets to panic.
President Obama has said that he’s willing to discuss cuts to some programs, but will not discuss anything that Republicans tie to the debt ceiling, saying:
“I will not have another debate with this Congress over whether or not they should pay the bills that they have already racked up through the laws that they passed. If Congress refuses to give the United States government the ability to pay these bills on time, the consequences for the entire global economy would be catastrophic.”
In other words, it appears that Republicans are perfectly willing to crash the economy and hurt everybody in exchange, or as punishment, for not getting their way, and Obama isn’t willing to play that game anymore.
Continuing to spend money at the rate we’re spending it is irresponsible; they are right about that. However, making it so that we can’t pay our bills is even more irresponsible, contrary to what many Republicans say. The debt ceiling is not about spending more money; it’s about paying for money already borrowed and spent. Like paying your credit card bill: you’re not paying to increase your debt; you’re paying for money you’ve already spent.
An honest effort to negotiate lowering the deficit would not and should not include holding the debt ceiling hostage again.