"Default" Is a Red Herring in Debt Ceiling Debate
Yesterday, President Obama accused his opposition in Congress of threatening to “default” on America’s loans in order to make a political point.
I am not going to have a monthly or every three months conversation about whether or not we pay our bills because that in and of itself does severe damage. Even the threat of default hurts our economy. It’s hurting our economy as we speak. We shouldn’t be having that debate.
But the “threat of default,” as Obama called it, is a red herring.
“Suggesting that the United States might default on its debt is factually wrong and shameful behavior on the President’s part,” Heritage’s J.D. Foster, the Norman B. Ture Senior Fellow in the Economics of Fiscal Policy, said yesterday.
The U.S. is not going to default on its interest payments, Foster said, and “this assurance rests not on congressional action to raise the debt ceiling, but on the simple fact that the Treasury has far more than enough funds to pay all interest as it comes due.”
Facts have been slim in the President’s rhetoric on the debt ceiling. And in his press conference yesterday, he dug himself into a deeper hole, again arguing against his toughest opponent: the Barack Obama of 2006.
In 2006, when Republicans were trying to raise the debt ceiling, then-Senator Barack Obama said, “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills.”
Yesterday in his press conference, the President argued the opposite. This time, he said raising the debt ceiling was simply an acknowledgement of the country’s bills:
America cannot afford another debate with this Congress about whether or not they should pay the bills they’ve already racked up.
The Heritage Foundation isn’t the only one that has noticed the President’s complete reversal of his position on this issue. This morning, The Washington Post’s “Fact Checker,” Glenn Kessler, revisits then-Senator Obama’s 2006 speech arguing against raising the debt ceiling. Kessler contrasts Obama then with Obama now:
On Monday, at a news conference, he urged lawmakers to boost the debt limit without conditions: “We’re going to have to make sure that people are looking at this in a responsible way, rather than just through the lens of politics.” (In other words, don’t do what I did back when I was a lawmaker.)
Kessler usually awards public figures with a number of “Pinocchios” if he finds them to be stretching the truth. But in this case, he gives Obama an “upside-down Pinocchio”—an unusual rating:
For making an argument that the president now decries as politics, he earns the upside-down Pinocchio, signifying a major-league flip-flop. (We have rarely given this ruling, but are eager for other examples from readers.)
>>> See the Congressional Record where Obama spoke against raising the debt limit in 2006
Though Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke have questioned the need for a debt ceiling, lawmakers of both parties have acknowledged that it gives Congress unique leverage with the President to demand spending cuts or other policy changes in exchange for increasing the limit. And cutting spending is exactly what Members of Congress should be doing right now.
As Heritage’s Foster put it, “Talk is cheap, but the consequences of continuing on today’s path of massive deficit spending will prove very expensive, if not downright ruinous, for future generations. And so Republicans are exactly right to use the debt ceiling debate to force the President to move beyond conversations and dialogue, to leadership and action.”
What does it mean to raise the debt ceiling? Watch this humorous video that puts it in perspective.