Paul Revere by Cyrus Dallin, North End, Boston

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The Irrelevant Ghoul

The Irrelevant Ghoul
A noun, a verb, and 9/11

Wednesday, January 2, 2013

President Obama's Warning on Debt Ceiling


Will the Republicans bring us to the brink again?  Here's President Obama on that possibility:



"Cutting spending has to go hand-in-hand with further reforms to our tax code so that the wealthiest corporations and individuals can't take advantage of loopholes and deductions that aren't available to most Americans. And we can't keep cutting things like basic research and new technology and still expect to succeed in a 21st century economy. So we're going to have to continue to move forward in deficit reduction, but we have to do it in a balanced way, making sure that we are growing even as we get a handle on our spending. 

 Now, one last point I want to make -- while I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills that they’ve already racked up through the laws that they passed. 

Let me repeat: We can't not pay bills that we've already incurred."



Some historical perspective: 

"Republicans combined to vote for a debt limit increase 19 times during the presidency of George W. Bush. In doing so, they increased the debt limit by nearly $4 trillion. 

At the beginning of the Bush presidency, the United States debt limit was $5.95 trillion. Despite promises that he would pay off the debt in 10 years, Bush increased the debt to $9.815 trillion by the end of his term, with plenty of help from the four Republicans currently holding Congressional leadership positions: Speaker John Boehner, House Majority Leader Eric Cantor, Senate Minority Leader Mitch McConnell, and Senate Minority Whip Jon Kyl. 

ThinkProgress compiled a breakdown of the five debt limit increases that took place during the Bush presidency and how the four Republican leaders voted: 

 June 2002: Congress approves a $450 billion increase, raising the debt limit to $6.4 trillion. McConnell, Boehner, and Cantor vote “yea”, Kyl votes “nay.” 

May 2003: Congress approves a $900 billion increase, raising the debt limit to $7.384 trillion. All four approve. 

November 2004: Congress approves an $800 billion increase, raising the debt limit to $8.1 trillion. All four approve. 

March 2006: Congress approves a $781 billion increase, raising the debt limit to $8.965 trillion. All four approve. 

September 2007: Congress approves an $850 billion increase, raising the debt limit to $9.815 trillion. All four approve. 

Database searches revealed no demands from the four legislators that debt increases come accompanied by drastic spending cuts.   In fact, the May 2003 debt limit increase passed the Senate the same day as the $350 billion Bush tax cuts for the wealthy. 

When Bush was in office, the current Republican leaders viewed increasing the debt limit as vital to keeping America’s economy running."


Worth Remembering: Republicans Usually Support Debt Ceiling Increases 


The majority of the debt ceiling raises under Bush were done with a Republican Congress. Even after the Democrats took over, the Republicans supported raising the debt ceiling.   Bush raised it 7 times, Clinton 4 times.

Will the Republican leadership hold this country hostage again and risk more financial uncertainty here and globally as the debt ceiling vote approaches?

I'm guessing it will, since  past behaviors are a pretty good indication of future actions.  

The real question is how President Obama will handle this next Congressional-induced crisis.

32 comments:

taospeaks said...

The reality is that after the last debt ceiling fiasco the right would be committing Hara-kiri if they attempt to use it as leverage.

Further, now the big fight will be over spending cuts, which will also be dealt with at the same time as the debt ceiling.

That is going to involve tax reform, closing of loopholes, and corporate income tax rates.

When it is all said and done no one will be happy, not the left nor the right, but the Tea Party is sure going to wish they had accepted the Grand Bargain that Obama and Boehner worked out sometime ago...

Anonymous said...

Where was his "hold the line" attitude when he extended the Bush tax cuts and was left a ridiculous "fiscal cliff" and watched our credit rating drop? I see no fight in this guy.

Silverfiddle said...

We need a simple tax code with no deductions.

Pay your flat percentage of what you made and be done with it.

They should start with eliminating the state tax deduction.

Anonymous II said...

Poutrage from the left.

Obama pisses off the righties and the far lefties. He's doing all right.

Anonymous said...

"Further, now the big fight will be over spending cuts, which will also be dealt with at the same time as the debt ceiling."

I doubt either problem will be "dealt" with, as in fixed.

skudrunner said...

"already racked up through the laws that they passed."

He must have been looking in a mirror because it was The Obama who pushed ACA and pushed the stimulus to nowhere. Those two massive programs that will never be paid for.

Lets go with the Fair Tax, eliminate all deductions, capture taxes from the underground economy and assure everyone pays their "Fair Share" as The Obama wants. This would strip the politicians from some of the power they prize, punitive taxes, and free them up for more important issues like which lobbyist to pay form their junket to view the poor in Hawaii.

Anonymous said...

Everyone should pay their fair share, including drug dealers. Legalize it and tax it.

Rational Nation USA said...

@taospeaks... "When it is all said and done no one will be happy, not the left nor the right, but the Tea Party is sure going to wish they had accepted the Grand Bargain that Obama and Boehner worked out sometime ago..."

As much as anyone, or everyone may not like it you just might be right TAO.

KP said...

I am listening to "Clair De Lune" by Claude Debussy, on repeat, care of the Philadelphia Orchestra Conducted by Eugene Normandy.

So it is not difficult to attempt objectivity. I agree with a lot of what taospeaks said (RN agrees with some). skud and SF hold similar tax views with mine.

On the recent bill ...

This looks like a poor deal for Dems to me. Within a few weeks, Repubs will insist on entitlement demands. Recall, Obama started fiscal cliff discussions by saying that the final fiscal cliff deal will “permanently address the debt ceiling so we never go through this again.”

On 3/3 – Sequestration cuts kick in.

On 3/27 – Federal funds run out and we face government shutdown.

In late February we reach the debt ceiling.

And this current deal addresses none of the debt ceiling issue.

What this deal does is ensure that the debt ceiling fight is on. But the stakes are now much higher.

The President says he will not negotiate on the debt ceiling.

But Repubs will:

Ask for spending cuts.

They may try to change CPI in social security.

Ask to change Medicare entry fee age requirements.

Recall, the President has already put these items on the table.

We are all backed into a corner. There are some tough times ahead.

If you consider todays stock market advances as a good sign, get your anti-depressants filled in advance. We are in for a tumble.

By the way, any discussion about jobs? We never should have done Obamacare. Jobs and taxes were mission numbers one and two. In my view, that would have been best for America.


KP said...

Arabesque 1 ... ahhhh ... is there a problem? Not that I can't over come.

Silverfiddle said...

One thing is as certain as death and taxes:

In Obama's America, politicians continue to do the corporations' bidding:

The "fiscal cliff" legislation passed this week included $76 billion in special-interest tax credits for the likes of General Electric, Hollywood and even Captain Morgan. But these subsidies weren't the fruit of eleventh-hour lobbying conducted on the cliff's edge -- they were crafted back in August in a Senate committee, and they sat dormant until the White House reportedly insisted on them this week.

The Family and Business Tax Cut Certainty Act of 2012, which passed through the Senate Finance Committee in August, was copied and pasted into the fiscal cliff legislation, yielding a victory for biotech companies, wind-turbine-makers, biodiesel producers, film studios -- and their lobbyists.


http://washingtonexaminer.com/tim-carney-how-corporate-tax-credits-got-in-the-cliff-deal/article/2517397#.UOWEGkG_Oga

Washington DC: The best government money can buy.

Silverfiddle said...

Obama's America: Still a crony crapitalist playground...

WaPo: Congress gives end of year perks to special interests

Before an Obama-worshiper springs up and points out that it was Congress what done it, consider that Obama signed the bill. Well... Maybe you can blame his auto-pen, since he was off vacationing in Hawaii, such was the fiscal cliff crisis.

This from the WSJ:

There's plenty to lament about the capital and income tax hikes, but the bill's seedier underside is the $40 billion or so in tax payoffs to every crony capitalist and special pleader with a lobbyist worth his million-dollar salary. Congress and the White House want everyone to ignore this corporate-welfare blowout, so allow us to shine a light on the merriment.

WSJ: Crony Capitalist Blow out

Folks, we have serious problem, and its a bipartisan one, but continue banging drums and screaming about fox news and the evil rethuglicans, that's so much more entertaining...

Shaw Kenawe said...

"In late February we reach the debt ceiling.

And this current deal addresses none of the debt ceiling issue.

What this deal does is ensure that the debt ceiling fight is on."

There shouldn't be any discussion on addressing the debt ceiling. That issue means the United States will pay its debts. To not increase the debt ceiling is to renege on paying the money the United States owes and puts us in the position of losing our global credit rating.

The GOP has in the past ALWAYS voted to increase the debt ceiling, and refused to do so only with the present Teapublican Party in power in the House, and with Mr. Obama in the White House.

There should be no negotiation on paying the back the money we have already spent.

Gerry Mander said...

The Republican hate for Obama has blinded them. They have reached this pinnacle of power through carefully hiding their agenda behind propaganda and Fox News.

President Obama lured them out into the open with his carefully crafted chess game where he played the weak bird with the broken wing. Flap, flap, "look at me! I'm practically a lame duck!" Obama lured them out into the open and in their haste to not get trapped, he managed to trip them up and split their party.

Rep. King is calling for people to no longer donate to the Republicans. Cantor is working on a coup. The right is ready to eat anyone who broke from the party line. The Speaker of the House has been turned into a laughing stock. He's at the point where, in the White House he told Reid to "Go fuck yourself." This is not a healthy party.

For the first time since Reagan the right voted to raise taxes on the wealthy. (This is pretty big, really. Consider that Obama has, somehow, managed to get the right to break on their number one priority). Now what do they stand for?


Obama it seems, has one trick up his sleeve after another. The Republican sleeves are empty of tricks. Just propaganda and lying left. Romney was proof of that.


KP said...

@Gerry Mander Do you view the Obama tricks you speak of as anything other than political victories?

What, specifically, do these tricks do for men and women who need jobs? What is the President doing to loosen the purse strings and promote investment in America from business that is sitting on record amounts of cash?

What is the end game? How do Obama's political victories or having the Republican party in shambles promote prosperity, jobs and significant revenue stream? We need growth. I don't mean these questions to be rhetorical; I don't see the plan.

Anonymous said...

It's a start that the Republican leadership and policies that have created this mess be stopped. Having the Republicans at each others throats helps stop that legislative numerical superiority.
Obama is not in charge of private corporate money.It's not up to him what they do with their money. It's silly to say Obama is stopping corporations from investing in America. Ask the corporations why they refuse to invest in America. When they say something stupid like Obama's regulations, they are lying.

Silverfiddle said...

So, as we approach the debt ceiling, will President Obama repudiate his crony crapitalist buddies? Or will he allow them to continue their stranglehold on the taxpayer?

KP said...

@Anon You come at me like I said Obama is stopping Corporations from investing. I didn't say. Drop your Dem hat for a minute a try to provide an answer. I don't have _the_ answer.

My question as an interested American, not a leftie or rightie, does Obama have a plan to loosen purse stringa and promote investment?

If you don't know, admit it. I don't know. But I can tell you this: we cannot tax our way out of this mess. Obama knows this. Try to satisfy me and others; what is his plan for growth.

Please, don't say Repubs are dick-heads. The blog has established that on a daily basis. Assuming that mindset, and hand of cards, is there a plan?

Rational Nation USA said...

Raise the debt ceiling, cut spending including the DoD, revise the tax code reducing tax brackets to three, close loopholes, eliminate deductions, and establish a flat tax.

Then tale a look at whether additional revenue enhancement (tax increases) will be needed. As Obama's crony capitalist buddies, it seems in some things nothing ever really changes.

KP said...

I would enjoy hearing serious responses to my earlier post to Gerry Mander as well as this one.

Gerry Mander said << Obama lured them out into the open and in their haste to not get trapped, he managed to trip them up and split their party.>>

Both parties take turns looking fractured. Remember Hillary vs Obama?

In six weeks the Dems will look fractured. When Obama or surrogates says Medicare age qualifications need to go up and SS CPI is set to change -- in an effort to reach further legislate tax reform and increase revenue, we will see the far left react the way some Repubs are now.

Both sides look curious to me. There will be give on both sides. Gov Ed Rendell, one of my favorite politicians, gets it. We will never be able to address other Dem issues like climate control, guns, immmigration, etc, if the debt issues are not resolved.

I fail to see why Dems think they are in a super powerful position. All parties need to turn their attention to problem solving.

No wonder over have the marriages in this country fail. Men and women are determined to be _right_ over making it work.

When does marriage really work? When both sides feel like they are giving up more than their spouses. CLUE: they aren't; it just feels that way.

Gerry Mander said...

"Both parties take turns looking fractured. Remember Hillary vs Obama?"

Neither of those two were governing the country at the time, unlike what is happening with the Repubs and their fracturing now.

It wasn't a fractured Democratic Party that got Obamacare passed, IIRC.

Anonymous said...

I say call them on their bluff. Tell them no negotiations. If they refuse to raise the debt ceiling, any default will be on their head. They will soon come to their senses once the ramifications of a US government default (worldwide depression, riots, gasoline rationing, food shortages) would really bring. Much like the boy who cried wolf, no one believes or listens to them anymore.
Tim

Silverfiddle said...

KP: Forget it, my friend. You are searching for dialog and answers from people who are interested only in political hero worship and team sport.

The left is in just as much trouble as the right; they just don't know it yet. The coming crack up will be fun to watch...

Anonymous said...

"What is the President doing to loosen the purse strings and promote investment in America from business that is sitting on record amounts of cash?"

Your question was "What is the president doing...."

It's not his job to spend corporate money, nor can he. Your question is moot, but your asking it infers he can do anything about how corporations spend their money he cannot. So stop falsely putting that question on him.
You have proven to be against Obama and take any effort to put blame on Obama, whether or not he can do anything about your problem with whatever.
I never said Republicans were dick heads, but that comment by you also shows your intolerance with anything Democratic.
I too look for serious people to discuss issues. That leaves out you, RN, SF, and other Obama bashers and supporters of Republican idiocy.
Ask serious questions and you might be considered a serious person, but you have just proven you are not.

Anonymous said...

And now Republicans say a partial shutdown of the government may be necessary. Another attempt to stop government, not find solutions to their problem.

KP said...

SF, the left does have just as much trouble as the right. Like you say, it's just not in their face yet. But it will be palpable in several weeks.

Shaw, thanks for your concise comments on the debt ceiling. You are correct, that is money already spent and must be accounted for.

I think you would enjoy this well written article on debt and deficits, examples, analogies and definitions. I would be interested to hear if you agree with Kirk Stiltner whose guest post is at Capaitol Commentary:

http://capitolcommentary.com/2013/01/03/u-s-deficit-and-debt-truth-in-numbers/

KP said...

@Rational Nation Hey, way to give it a go! I could live with that plan. It would create certainty which will promote private investment. That increases revenue streams along with the tax reform. The key would be reducing spending.

Anonymous said...

RN,

Republicans refused to raise the debt ceiling (lost our top credit rating) and for decades Republicans refused to cut spending, especially DOD spending. Republicans (who are in majority) have proven they will do neither. So good luck with that.

Rational Nation USA said...

rEpublicans have in reality have become nothing more than spendthrift Keynesians in spades.

Somebody once said the definition of insanity is doing the same thing over and over again while expecting different results. Forgot who it was. But the point is we have essentially been doing precisely that.

There are a lot of smart good people with good ideas. No one person, or party has all the answers.

I find myself doubtful that things will ever change.

It's more fun playing darts than finding solutions it seems.

History tends to repeat itself.

DaveyJonesDetroit said...

Maybe that Evil Republican Congress should cede to the President its Constitutionally mandated duty to control how much money is borrowed and spent. Who really cares, anyway?

Um, I dunno. Like, people who know the Federal Government spends $10M a minute of THE PEOPLE'S MONEY, and borrows $4.1 BILLION dollars a day just to cover minimum payments on the interest on the OVER $16 TRILLION and growing national debt [your family's share over $100,000]. Wonder what the Government Accountability Office report really says on the idea of minting a Trillion Dollar Coin? After trying to spend our way out of debt and QE 1-300 it’s all Monopoly Money at this point.

“Giving money and power to government is like giving whiskey and car keys to teenage boys.”
– P.J. O'Rourke [www_lpboulder_org/quotes/]

KP said...

@Anon

"Your question was "What is the president doing...."

"It's not his job to spend corporate money, nor can he. Your question is moot, but your asking it infers he can do anything about how corporations spend their money he cannot. So stop falsely putting that question on him."

Let me try and help you see what I mean. My question was not one that blames Obama. Rather, I am trying to understand his plan going forward.

Lets stipulate that Obama has a bad hand (as many of us do). Once we agree on his considerably tough position; what can he do to help encourage business to invest?

Does the President have a plan? Not a plan to spend any corporation's money. Does he have a plan to encourage _them_ to spend their money and help create growth and jobs. My feeling is that certainty would encourage spending by business.

Certainty is what business wants. That is what we all want. I am not pointing a finger.

What is his plan? Tax hikes, tax cuts, tax reform? Trade? War? Printing money? Inflation? Debt reduction? Stimulus?

KP said...

@Anon

"Your question was "What is the president doing...."

"It's not his job to spend corporate money, nor can he. Your question is moot, but your asking it infers he can do anything about how corporations spend their money he cannot. So stop falsely putting that question on him."

Let me try and help you see what I mean. My question was not one that blames Obama. Rather, I am trying to understand his plan going forward.

Lets stipulate that Obama has a bad hand (as many of us do). Once we agree on his considerably tough position; what can he do to help encourage business to invest?

Does the President have a plan? Not a plan to spend any corporation's money. Does he have a plan to encourage _them_ to spend their money and help create growth and jobs. My feeling is that certainty would encourage spending by business.

Certainty is what business wants. That is what we all want. I am not pointing a finger.

What is his plan? Tax hikes, tax cuts, tax reform? Trade? War? Printing money? Inflation? Debt reduction? Stimulus?