Obama Rules Out New Debt Ceiling Showdown



Obama rules out new debt ceiling showdown (via AFP)

President Barack Obama warned Wednesday he would reject any deal to end a looming fiscal crisis that let Republicans wield new leverage next year over lifting the cap on government borrowing. Obama staked out his position after the New York Times reported that Republicans may bow to his demand to hike…



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Author: Guest Voice

  • clarkma5

    Hmmm I’m not sure how I feel about having the executive branch wield the power to raise the debt ceiling. In the near term, with intransigent Republicans using it to push a minority agenda against the wishes of a majority, removing that arrow from their quiver is very appealing. But then what happens in a decade, perhaps when the executive branch is on the wrong side of common sense and the legislature is trying to do the right thing? What then?

  • slamfu

    I would be absolutely fine with the exec branch having that power. The debt ceiling is something that MUST be raised when its hit. It’s not about laying out a budget at that point, its about paying for what we have already spent. The very idea that it can be held up by a minority party throwing a hissyfit might have been cute as recently as 10 years ago, but with the idiots running the GOP now, it has become clear that they are perfectly will to let national credit get tanked and bring us to a possible global financial meltdown if they don’t get EVERYTHING they want to protect their 1% backers. I’m perfectly willing to put the shoe on the other foot and agree that a GOP president should have the power to raise it over the objections of a Democratic Congress that is being equally stupid about something that should just happen automatically.

  • SteveK

    Right on slamfu, you nailed it.

    Past congressional action is the ONLY reason the debt ceiling EVER needs to be raised and Congress has already had it’s say in the matter… They’re the ones that spent the money that make it necessary n the first place.

    The actual raising the debt ceiling is an executive action that protects the credit rating of the United States from overspending done by Congress… Covering their butts so to speak.

  • http://elijahssweetespot.com tidbits

    While I understand the itch and how much people would like to scratch it, putting more power in the hands of the executive branch is not on my to-do list.

    A middle, or moderate, position might be to deem the ceiling raised when necessary in the absence of Congressional action to the contrary.

    This could be by majority of both houses, not the two thirds super majority involved in the proposed executive branch power grab. This moderate alternative would create an opt-out [of the debt ceiling increase] option for Congress instead of the current opt-in situtation, or the proposed executive branch option.

  • slamfu

    I don’t think you get it, the debt ceiling increase is a procedural process equivalent to writing the check for the thing you just bought. Whether the debt ceiling gets raised or not has no effect on the deficit since the money has already been spent. All it does is allow for payment. This is one of those things that should just be rubber stamped, not used as it has been to bring things screeching to a halt because someone couldn’t get what they wanted when the budget was actually being put together. By not raising the debt ceiling your basically saying we can buy stuff and not pay for it. With so much of the world tied into our treasuries and themselves so economically unstable the very idea that anyone would be so indescribably stupid as to play games with this process, to prevent a minor tax hike on the top bracket earners no less, is madness. You want to see money disappear out of the economy, keep playing games with this. The amount collected in taxes will pale in significance to the amount of money that will vanish if this is employed.

    EDIT TO ADD:

    In short, raising the debt ceiling is just one of those processes that needs to work flawlessly, like the brakes on your car. If Congress can’t be trusted to even handle routine procedural processes because it has grown THAT disfunctional, I’m all for handing it off to anyone who can. Without any consideration for it being a power grab. This is probably the most clear cut example of a screwed up govt.

  • http://elijahssweetespot.com tidbits

    Sorry for any misunderstanding, slam. Trust me, I know what it is and how it works. I also know that, for decades it was a smooth procedural given, through D and R administrations. Everyone understood that it was necessary and nobody played games of political chicken with it.

    But, that has changed. And, that’s why I suggest putting the onus the other way round. Instead of Congress having to approve increases, Congress would have to affirmatively vote to intervene and force a payment default scenario. Using the opt-out option puts us back where we have traditionally been. The ceiling goes up automatically when needed to protect the full faith and credit of the USA, unless Congress by a majority of both houses votes to intervene. The benefits of this are twofold: 1) Congress would never take the extraordinary step of forcing a payment default (it’s much easier to play political brinksmanship by threatening not to affirmatively raise the ceiling in the current scenario) and 2. the power of the purse remains, at least symbolically, with Congress where it belongs.

    Honestly, if raising the debt ceiling becomes automatic, it likely would never be heard of as an issue again. Since no action would be necessary to raise it, there would be no occasion to bring it up or report on it.

    Just my view.

  • dduck

    What tibits said.

  • StockBoyLA

    I think the debt ceiling, in a way, is silly. The budget is passed with everyone knowing full well the fiscal implications and spending required. I’m not saying we should spend spend spend without an eye on a limit. But using the debt ceiling as a political tool is wrong.

  • Rambie

    I’d rather see us NOT hit the credit limit again, but since that’s not a reality at this time, I agree with Tidbits plan.

    Even assuming the Congress would vote and pass for such a bill, it could still be vetoed by the sitting President.

  • http://www.americaincontext.com Barky

    I urge caution regarding the executive branch and the debt ceiling. Per the Constitution, Congress has the power of the purse. Even though recent Congresses have been totally irresponsible with that power, it is still THEIR power. It should not be taken away just because this particular Congress are idiots. They should be held accountable for their actions.

    We have separation of powers for a reason: not doing so leads to tyranny. And if anything, the Executive Branch has too much power already.

  • zusa1

    Thanks Barky.

  • StockBoyLA

    Power of the purse. Yes, Congress can name budgets and if you think about it, the power to raise the ceiling should be with the president. If the debt ceiling us meant to keep spending in check, then what is the purpose of giving power to Congress to regulate its own activities? Otherwise Congress can spend spend spend and raise raise raise unfettered by any real checks.

  • slamfu

    Giving the president automatic debt ceiling approval powers does nothing to remove the power of the purse from Congress. They still get to decide what gets spent. The debt ceiling in no way affects the deficit. Getting rid of this farce just removes one more procedural annoyance that can be used to gridlock things if they want to throw a hissyfit.

    And the fact that it would never be heard from again is great. In fact, when it was instituted after WWI, it was suggested that it be an automatic power for exactly this reason. I no more want to hear about this than I want to hear about congress requisitioning more reams of paper to print bills on, because that’s something that’s just supposed to happen.

  • SteveK

    Again slamfu nails it.

    The congress, by authorizing spending above and beyond the debt ceiling, has by that action raised the debt ceiling. I believe everyone commenting in this thread realize that to be true.

    Implying that that is not the case… Is simply an attempt to mislead.

  • The_Ohioan

    slam is right. Congress controls the purse and if they outrun the amount the President asks to be budgeted, and certainly things happen, fires, floods, depressions and wars, to cause this, it is up to the executive to have the authority to pay those bills. If that means raising the debt ceiling, which gives us the ability to borrow more to pay those excess bills, he’s the guy that has to do it – he pays the bills – otherwise we are in default. He has no say about how much is spent (except with a veto which can be overridden) only how we can borrow the money to be sure that what is to be spent is paid for.

  • http://elijahssweetespot.com tidbits

    My Friends,

    I write with a smile on my face. You want this power for the executive? You believe that Obama will use this power wisely, and you may be correct. Will you feel the same if the next president (just 4 years hence) is named Bachmann…or Santorum…or Palin…or Ryan…or(Rand) Paul.

    Will you like this idea when a right wing Republican president threatens to put the country in default unless congressional Democrats agree to gut Medicare? Remember – Please – their are radicals who truly believe that putting the country into default is the “right” [pun intended] course of action.

    Love ya and respect the hell out of you, but you’re being very short sighted on this. If radical R’s will use this for brinksmanship when they can at the congressional level, imagine what will happen when one, lone radical R, sitting in the oval office, has this power because you loyal D’s insisted that it was a grand idea to move this power to the executive branch.

    Be careful what you wish for. God bless you for your innocent belief that reasonable representatives of your party will forever reside in the White House. But, God help us if the radicals ever manage to elect one of their own as POTUS.

    Love,

    tidbits

  • cjjack

    Honestly, if raising the debt ceiling becomes automatic, it likely would never be heard of as an issue again. Since no action would be necessary to raise it, there would be no occasion to bring it up or report on it.

    On some level, I think this might actually be a good thing.

    We’re inventing entirely artificial limits – the debt ceiling, the fiscal cliff – that have less to do with limiting spending than they do with limiting choices our elected leaders can make.

    In a way, these things are the mirror image of Grover Norquist’s no tax pledge. They’re purely political constructs that hamstring the people who have signed onto them and make the artificial limit the issue rather than the actual problem at hand.

    The insanity of this is being demonstrated right now by the Republican party. If you told John Boehner you’d figured out a way to raise 1 trillion dollars in revenue by eliminating deductions and loopholes on people making over 1 million dollars a year – effectively taxing them more but not raising their rates – he’d probably go for it, and trumpet it as a compromise worth making.

    If, however, you presented him with a plan that would generate the exact same amount of revenue from the exact same people, but it involved raising their tax rates, he’d dismiss it as socialist wealth distribution.

    Why? Because he’s wedded himself to the Norquist pledge that you cannot raise tax rates no matter what. Like the “fiscal cliff” and the debt ceiling, it is an arbitrary and entirely political construct that has no use in the real world except to make politicians do stupid things.

    If raising the debt ceiling were automatic…if the “fiscal cliff” had never been invented…if Grover’s tax pledge had never been signed…the end of this year would present exactly zero risk for the Democrats and Republicans. The lame duck Congress would dutifully sign whatever spending measures were needed to keep the government operating for the next year, and the incoming Congress would have relatively few problems coming up with a budget for the following year.

  • http://elijahssweetespot.com tidbits

    @cjjack –

    Yes, exactly. Thank you for saying it better than I have been able to do.

  • The_Ohioan

    In 1979, Rep. Richard Gephardt (D) of Missouri proposed setting the debt limit automatically at the level projected by the most recent budget resolution. The rule, still in effect, allows for the debt limit to be raised without the House having to take an unpopular stand-alone vote.

    In 1995, then-majority House Republicans waived the Gephardt rule. They refused to raise the debt limit in a bid to force President Clinton to accept spending cuts — prompting two government shutdowns.

    http://www.washingtonpost.com/blogs/wonkblog/post/house-eliminated-debt-ceiling-votes-in-1979/2011/04/13/AFLcQxOE_blog.html

    They paid the price. It doesn’t have to be (and shouldn’t be) in either branch’s hands. The Gephardt rule should be restored along with the Glass-Stegal Act.

  • slamfu

    I don’t think either party should be able to stop the debt ceiling being raised. Or either branch. I think if Congress has already spent it, the debt ceiling should automatically go up when the bill comes due. I would be fine with a president, even a president Santorum, having the ability to avoid a govt shutdown over an a procedural issue like the raising of the debt ceiling. But lets be honest, only the GOP has ever been absurd enough to do this unless I am mistaken. So yea, the Gephardt rule sounds great, it should absolutely be re-instated regardless of who is in the Oval Office. Congress still controls the purse strings, and the executive branch doesn’t become more powerful, Congress simply becomes less disfunctional. It’s not a zero sum game.

  • hyperflow

    I think the debt ceiling, in a way, is silly. The budget is passed with everyone knowing full well the fiscal implications and spending required.

    Really? I think that is the point the GOP is trying to make: people are NOT fully aware that we are raising the ceiling, and if we ARE raising the ceiling it should be a big deal and not a procedural issue.

    I’m no tea party but debt is not only real it is with interest. If neither party has the balls to balance the budget, then it is probably better that one minority faction — even if they are acting like stupid children — is making an issue out of the debt.

    YES I am aware we have had higher debt GPD ratios.
    YES I am aware that the bush era tax cuts were irresponsible stupidity.
    YES I am aware that infrastructure spending is good ROI.

    STILL: you cannot escape the fact that debt is “a problem for future generations” — in the same way that Iraq became “a problem for future presidents”.

    Just because the other party is stupid doesn’t mean the right thing is being done.
    The great misfortune of a stupid GOP is that team blue dogs dont even have to try anymore.

    So much for holding feat to the fire.

    Future generations =
    spending debt + global warming + instable corrupt market

    Boy they are going to love us.

  • StockBoyLA

    Tidbits: “Will you like this idea when a right wing Republican president threatens to put the country in default unless congressional Democrats agree to gut Medicare?”

    I’m sorry I think I missed something. Exactly what did the Republicans in Congress want the Democratic Party to do a few months ago or they would send the country into default?

    Not sure I see the difference between a Republican president threatening to put the country in default if they don’t get their way and a Republican Congress threatening to put the country in default if they don’t get their way.

  • StockBoyLA

    Cjjack, “If raising the debt ceiling were automatic…if the “fiscal cliff” had never been invented…if Grover’s tax pledge had never been signed…the end of this year would present exactly zero risk for the Democrats and Republicans. The lame duck Congress would dutifully sign whatever spending measures were needed to keep the government operating for the next year, and the incoming Congress would have relatively few problems coming up with a budget for the following year.”

    If raising the debt ceiling were automatic, then why have one?

    The mess we’re in now is BECAUSE the R’s DID sign Norquists’s pledge. They made their decisions and the rest of the country is paying for it.

  • StockBoyLA

    Hyperflow, the “everyone” I was referring to were the elected officials who passed the budget and the elected officials playing games with the ceiling.

    As far as “Future generations =
    spending debt + global warming + instable corrupt market”

    I see the Dems wanting to address all three issues.

    The R’s are only interested in the debt piece, and even then they are not acting responsibly.

  • http://www.americaincontext.com Barky

    In engineering there is the concept of a “negative feedback loop.” It’s a system designed in such a way that if too much force, energy, speed, etc. is created, it automatically applies the “brakes” (literal or metaphorical). It’s used in everything from train locomotives to nuclear power plants to the audio amplifier in your stereo. It keeps the equipment from melting down, bursting into flames or crashing into people.

    This concept needs to be applied to spending and taxation as well. I think everyone can agree that either one getting out of control is bad. In the absence of other mechanisms, like a balanced budget amendment, all we have is the balance of powers and things like the debt ceiling.

    Taking these things “off the table” is just opening us up to runaway conditions.

  • http://www.americaincontext.com Barky

    I prematurely posted my last post. To complete the thought, if our elected officials have to periodically vote on items like the debt ceiling, it opens up for more conversations about the fiscal health of this government. Without that cross-check, it’ll just go on & on.

  • slamfu

    By the time the “conversation” gets to the debt ceiling vote, its already over. The money has been allocated and spent, and the vote is to simply pay it or default. What you are proposing is like going to dinner, talking about what you want to eat, ordering it, eating it, then refusing to pay the bill and saying you need to have a “conversation” about it. All the important stuff has already happened, and now your are just being an ass. The restaurant will treat you accordingly.

  • SteveK

    is like going to dinner, talking about what you want to eat, ordering it, eating it, then refusing to pay the bill and saying you need to have a “conversation” about it. All the important stuff has already happened, and now your are just being an ass. The restaurant will treat you accordingly.

    Again slamfu nails it.

    When the bill for what you spent comes due… You pay it. If you don’t like how much the bill is stop spending so much.

    Reneging is not an option so quit pretending it is.

  • zusa1

    Does knowing that a fight over raising the debt ceiling will be incurred in the future, curtail spending in the present?

  • SteveK

    Does knowing that a fight over raising the debt ceiling will be incurred in the future, curtail spending in the present?

    No… Especially now when when those wanting a fight (Republicans) are also in charge of how much is being spent.

    Check the books on “Congressional harassment of Presidents raising the debt ceiling”. This whole brouhaha is a brand new invention the Republicans dreamed up hoping it would help them make Obama a ‘one term President’…

  • zusa1

    “This whole brouhaha is a brand new invention the Republicans dreamed up hoping it would help them make Obama a ‘one term President’…”

    I don’t think this is quite true. From the reading I’ve been doing, this has been going on with every debt ceiling increase since Eisenhower. However, due to our current financial crisis, debt level, and ideological differences, the current debates are escalating.

  • SteveK

    PolitiFact.com – Obama says Reagan raised debt ceiling 18 times; George W. Bush seven times

    “Understand –- raising the debt ceiling does not allow Congress to spend more money,” Obama said. “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.”


    .
    .
    * * * * * * * * * * * *
    .
    PolitiFact.com – New Jersey Sen. Richard Codey claims “every president has raised the debt ceiling” during Fox News interview

    PolitiFact New Jersey took a look at the nation’s history of borrowing money and discovered that Codey was mostly right. Since an overall limit on most federal debt was first set up in 1939, the debt ceiling went up during every presidency with the sole exception of former President Harry S. Truman’s.


    .
    .
    * * * * * * * * * * * *
    .

    However, due to our current financial crisis, debt level, and ideological differences, the current debates are escalating.

    Some would say that this ‘faux’ problem is just another example of Republican Obstructionism… Like their world record filibusters…

  • zusa1

    SteveK, I’m not saying prior presidents didn’t raise the debt ceiling. I’m saying fights over it isn’t new.

    “Tussles over the U.S. debt ceiling, usually one of the most obscure issues in Washington, have a long history. The debt limit has been raised dozens of times since the mid-1950s, and every president since Dwight D. Eisenhower has had to cajole a reluctant Congress.”

    http://articles.marketwatch.com/2011-07-28/economy/30719945_1_debt-limit-debt-ceiling-treasury

  • SteveK

    I read your link zusa1 and as I wasn’t familiar with the author and as he was quite vague with his inferences of cajoling “a reluctant congress” I thought I’d see what else he’d written hoping to see if he had any particular leaning right, left, or center…

    Turnout for Romney, Republicans better than reported – Jeffry Bartash

    U.S. creates 146,000 jobs in November – Jeffry Bartash

    … I think we can safely say Mr. Bartash doesn’t qualify as a disinterested third party.

    I also imagine that in order to get EIGHTEEN Debt Ceiling increases passed Mr. Reagan (Ronald not Michael) didn’t have to cajole a reluctant Congress…

    Again this is an issue made up by an obstructive congress

  • zusa1

    http://www.ritholtz.com/blog/2011/05/debt-ceiling-limits-through-the-ages/
    Examples from the article
    The Federal Debt Ceiling (July 26, 1958)

    “A specter that has been putting in an appearance more or less regularly every year now since 1953 is again back to haunt the Administration. That is the problem of keeping the public dept within the dept ceiling – a problem that will be additionally complicated in the present fiscal year at least by the prospect of a very substantial budget deficit.
    http://www.ritholtz.com/blog/2011/05/debt-ceiling-discussion-1958/

    SENATE DEFEATS BILL TO INCREASE DEBT CEILING (November 1, 1983)
    http://www.nytimes.com/1983/11/01/us/senate-defeats-bill-to-increase-debt-ceiling.html
    Time Bomb in the Debt Ceiling (May 04, 1987)
    http://www.nytimes.com/1987/05/04/opinion/time-bomb-in-the-debt-ceiling.html
    REAGAN URGES A RISE IN DEBT CEILING (May 12, 1987)
    http://www.nytimes.com/1987/05/12/business/reagan-urges-a-rise-in-debt-ceiling.html

  • SteveK

    zusa1 – It seems we must agree to disagree because your three examples in fifty-four years are to me ‘exceptions’ apparently the ‘rule’ to you.

    Your ‘ritholtz.com’ link had a spreadsheet at the top of the article that at first seemed to be an impressively long list of ‘problems’… Than I saw that it was simply a record of every time the ‘debt ceiling’ was raised. The author at ritholtz seemed to be trying to imply that they were all contentious… But obviously they weren’t.

    Your second link was regarding one of Ronald Reagan’s eighteen…

    I could go on but I won’t because neither of us are ‘learning’ from the other and instead of continuing this disagreement I’d rather wish you a great, shopping center free weekend… Cheers!

  • zusa1

    SteveK, I thought I was just trying to show that this wasn’t a “brand new invention”. Hope you have a good weekend too.