Tuesday, May 31, 2011
DEBT LIMITS: WHAT NOW?
This is quite a worrisome, but totally unnecessary and inappropriate, political gamesmanship problem with potentially disastrous consequences. The obstructive stubbornness of GOP leaders, in obeisance to their Tea Party faction, threatens to bring the walls and roof down on the U. S. government.
There are several things we need to understand about the debt ceiling. Normally, it has not been an issue, because most people in Congress were responsible and somewhat sensible people. First, Congress votes to approve a budget, and commitments are then made under that spending plan. The various agencies of government then go about their business, spending up to the level budgeted.
That congressionally approved budget, or spending plan, has involved spending more than income. So, the budget included additional borrowing to cover the bills. Now, the GOP House, in its backwards and contradictory fashion, proposes not to allow borrowing the money it already authorized to be spent and reneging on promises already made.
Call this flip-flopping, call it irresponsible, call it playing the deadbeat, or call it GOP style politics. It amounts to fraud and amoral behavior on the part of any congressman who votes against the debt ceiling. This is true no matter how he/she voted on the budget. It is true no matter what excuses are offered.
If the budget was legally adopted, then we have legal bills to pay. This is too serious for game playing and political posturing.
Now comes the question: “What happens if Congress does not raise the debt ceiling now?” Of course, the fact is that Congress has already defaulted, and our executive branch has already been moving money and utilizing creative accounting so that the interest on our debt and our current bills continue to be paid in full.
But what happens this summer when these background adjustments will no longer work? Will we then default on our debt payments and send the world financial and currency markets into chaos? Yes, this is possible.
But some see a different scenario, one that nobody will like, and one with widespread grave consequences – stressful but short of world chaos.
If the republicans continue their obstinate position, then the president may well make a choice between paying the interest on the debt and paying the bills and salaries to run the government.
We may well hear a televised Oval Office talk which reminds us that the administration has put forth a responsible plan for reducing debt over time through cuts in spending and raising income. The President will explain that because of republican intransigence, he must now take necessary steps to cut expenditures so as to neither exceed the existing limit nor stop interest payments on the debt. These steps can include almost anything.
All grants for various community, health, educational, or scientific purposes may be suspended, including community grants, highway funds, college student aid, and all such. It may be announced that Social Security checks will be reduced or suspended, and that recipients will have to make arrangements to borrow from their bank until funding is put back on a normal level. The same could happen to Veterans’ benefits. Medicare could cease paying hospital and doctor claims, or cut these in half to reduce the outgo of money. Federal workers could be laid off, as well as state and corporate employees dependent on grants or contracts. Our military pay could be delayed by 20%. Courts could be jammed with suits, yet close the doors.
Indeed not paying one’s regular bills is tantamount to not paying one’s debts. The difference is the formality and legalities between bonds and bills. And neither is a good thing.
Yes, these and other action examples could become necessary if the irresponsibility of GOP members of Congress continues. Of course, blame for any such necessary actions would be unceremoniously laid at their political feet.
If the GOP members are politically dumb enough to vote for an austere budget bill that includes killing Medicare, then they may well be dumb enough to allow all this to begin to happen before hostile voters descend upon them in anger to force the issue to be properly resolved.
How long will the public stand for such obvious chicanery from one political party in tying up government with such unnecessary and irresponsible tactics?
Dr. Edwin E. Vineyard, AKA The Militant Moderate