PANTS ON FIRE

Tuesday, July 26th, 2011 | Uncategorized

Did you catch the President Obama’s televised speech on the debt ceiling debate last night?  I was at work so I missed it.  If you missed it as well or if you’d like to read his words and ponder them at your leisure, a transcript’s here.  Among other things, the President drove home just how serious a matter a default would be for the country:

Now, what makes today’s stalemate so dangerous is that it has been tied to something known as the debt ceiling -– a term that most people outside of Washington have probably never heard of before. 

Understand –- raising the debt ceiling does not allow Congress to spend more money.  It simply gives our country the ability to pay the bills that Congress has already racked up.  In the past, raising the debt ceiling was routine.  Since the 1950s, Congress has always passed it, and every President has signed it.  President Reagan did it 18 times.  George W. Bush did it seven times.  And we have to do it by next Tuesday, August 2nd, or else we won’t be able to pay all of our bills.  

Unfortunately, for the past several weeks, Republican House members have essentially said that the only way they’ll vote to prevent America’s first-ever default is if the rest of us agree to their deep, spending cuts-only approach.   

If that happens, and we default, we would not have enough money to pay all of our bills -– bills that include monthly Social Security checks, veterans’ benefits, and the government contracts we’ve signed with thousands of businesses. 

For the first time in history, our country’s AAA credit rating would be downgraded, leaving investors around the world to wonder whether the United States is still a good bet.  Interest rates would skyrocket on credit cards, on mortgages and on car loans, which amounts to a huge tax hike on the American people.  We would risk sparking a deep economic crisis -– this one caused almost entirely by Washington.

So defaulting on our obligations is a reckless and irresponsible outcome to this debate.  And Republican leaders say that they agree we must avoid default.  But the new approach that Speaker Boehner unveiled today, which would temporarily extend the debt ceiling in exchange for spending cuts, would force us to once again face the threat of default just six months from now.  In other words, it doesn’t solve the problem.  

First of all, a six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and the higher interest rates that all Americans would have to pay as a result.  We know what we have to do to reduce our deficits; there’s no point in putting the economy at risk by kicking the can further down the road.    

But there’s an even greater danger to this approach.  Based on what we’ve seen these past few weeks, we know what to expect six months from now.  The House of Representatives will once again refuse to prevent default unless the rest of us accept their cuts-only approach.  Again, they will refuse to ask the wealthiest Americans to give up their tax cuts or deductions.  Again, they will demand harsh cuts to programs like Medicare.  And once again, the economy will be held captive unless they get their way. 

This is no way to run the greatest country on Earth.  It’s a dangerous game that we’ve never played before, and we can’t afford to play it now.  Not when the jobs and livelihoods of so many families are at stake.  We can’t allow the American people to become collateral damage to Washington’s political warfare. 

Strong words.  Words that Mr. Obama himself doesn’t seem to believe.

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