Editorial: Debt ceiling disconnect
Here’s the disconnect on the issue of the hour: Fewer than one in four Americans think that raising the debt ceiling is necessary to avoid a national economic crisis, according to a recent Gallop poll.
However, political leaders of both parties agree that that it is essential to raise the debt ceiling to avoid that very crisis, as do the nation’s financial leaders, banks, treasury secretary, Federal Reserve chief Ben Bernanke, and, most recently, Moody’s, which placed the United States of America on review this Wednesday for a possible bond rating downgrade.
“This warning shot from Moody’s should be sobering to those who doubt the gravity of this perilous game of chicken,” said Congressman Peter Welch, D-Vt. “There will be no winners. The clock continues to tick. Congress has two choices: Raise the debt ceiling on our own initiative or be pistol-whipped into doing so by the bond markets. Moody’s warning suggests we are coming dangerously close to the latter option. … Default is wrong, unnecessary and completely avoidable. If negotiators are making progress, they should step up the pace. If, as it appears, they are moving farther apart, they should do the responsible thing and bring a clean debt ceiling extension to a vote… America cannot default on its obligations. We must pay our bills.”
But Vermont’s lone congressman might as well be spitting into the wind. Republicans want no part of being responsible by calling a vote, and the public doesn’t seem to get it.
According to Gallop’s poll taken July 7-10, only 22 percent of Americans would want their congressman to vote for raising the debt ceiling, while 42 percent want them to vote against, and another 35 percent don’t know.
By party, 60 percent of Republicans want to see their congressman reject raising the debt ceiling, while only 11 percent support it with 29 percent unsure. Democrats are better, but barely, as 39 percent favor raising the debt ceiling, while 21 oppose it and 40 percent are unsure. Independents favor the Republican position with 18 percent in favor, 46 percent opposed and 36 percent unsure.
Even more telling is a follow-up question in the poll that asks: Which concerns you more: 1) the government would not raise the debt ceiling and a major economic crisis would result, or, 2) the government would raise the debt ceiling but without plans for major cuts in future spending?
To that question, 32 percent of all Americans believed the first scenario was worse, compared to 51 percent who believed the second scenario was worse; 17 percent had no opinion.
In short, said the Gallop poll analysts, “Americans are significantly more concerned about the budgetary risk of giving the government a new license to spend than they are about the potential economic consequences that would result from not raising the debt limit.”
Apparently, Moodys, Bernanke, the nation’s leading financial institutions, the president, leaders of Congress — both Republican and Democrat — and many other financial experts simply don’t know what they’re talking about when they suggest that defaulting on the national debt could lead to an economic crisis, and that that would be far worse than raising the debt ceiling so we could pay our bills — just as Congress did under the Bush administration on several occasions.
Perhaps, Americans might pause for a thoughtful moment and consider what might happen if the nation can’t make Social Security payments, or send checks to the nation’s military veterans and the disabled. Do they really think that can happen with no effect on the nation’s economy? Do they really think downgrading our credit rating will have no economic impact?
Even Senate Republican leader Mitch McConnell of Kentucky warned Wednesday that allowing a federal default could have serious political consequences for his party and “destroy” the Republican brand. Why? Because Republicans would be saddled with a reputation for being irresponsible, intransigent and putting politics ahead of the economic well-being of the country.
And consider this analysis by the New York Times: “Political gain, not economic sense or sound policy, has always been at the core of the Republican strategy on the debt-ceiling crisis — a cynical ploy to appear serious about cutting spending while actually holding hostage the nation’s strong credit rating. Now that the real risks to their strategy are becoming apparent, including the possibility of cutting off Social Security checks, the more experienced members of the party are beginning to rethink their plans.”
The Timesreference was to McConnell’s plan to allow President Obama to raise the debt ceiling on his own by $2.5 trillion in three stages; then allow the Republican-controlled House to vote against each measure, but allow a presidential veto to override the Republicans’ objection. Furthermore, Obama would have to propose a like amount of government spending to match the increase in debt incurred, which, under McConnell’s plan, would be discussed as the President’s proposed cuts but which the Republicans could object to and never bring to a vote in the House or Senate.
The bottom line? Again, the Times’analysis: “The proposal is clearly meant to shift all the blame for raising the debt ceiling onto the president, and away from Republicans. Every Republican could proudly vote against the debt increases, but the ceiling would still go up because there are not enough Republicans to override a veto.” In short, it allows Republicans to avoid creating economic chaos (because Democrats will do the responsible thing) while saddling Obama with raising the debt ceiling and proposing cuts to benefits.
The cynicism and political calculation shown by McConnell’s plan, with complete disregard to the welfare of the national economy, is galling. Even worse, is that it is slightly better than prior proposals by House Speaker John Boehner, who said Tuesday that the debt ceiling was the president’s problem and Republicans were not going to lend a hand to help the country — as if this administration had started the wars in Afghanistan and Iraq, cut taxes for the wealthy at a cost of trillions, expanded Medicare, bailed out Wall Street, and run the nation into its worst financial crisis in 70 years. Nope, that was all done under the Bush administration, but will the Republicans step up to the plate now and help solve the problem? Not without a plan to blame the other party for its mistakes.
And McConnell is worried about “destroying” the Republican brand? Maybe what’s left of it.