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  • House Can Lead the Way

    Liberals from Capitol Hill to the cable networks keep insisting that the nation will go into default unless Congress raises the nation’s debt ceiling by August 2. All along we have felt that such a claim is at least technically wrong, seeing that unquestionably we will be able to make interest payments on our bonds. More confounding, however, is that the ones yelling the loudest that the debt limit must be raised also keep insisting that a vote tomorrow in the House of Representatives to raise the debt limit is “an empty and symbolic gesture.”

    How do we get there from here?

    The vote will be on the Cut, Cap and Balance Act, and liberals don’t like it because it cuts federal spending immediately, places a statutory cap on federal spending, and requires passage of a Balanced Budget Amendment to the Constitution, which would then be sent to the individual states for ratification. Passage of such an act would pave the way for raising the debt ceiling, which is politically unpalatable to Republicans and Democrats.

    Our sister advocacy organization, Heritage Action for America, announced today that it supports as a step in the right direction the Cap, Cut and Balance amendment to be voted on tomorrow in the House. Heritage Action seeks to drive down federal spending and borrowing while protecting America and not raising taxes.

    President Obama, who has threatened to veto Cut, Cap and Balance, and his supporters keep repeating the talking point that “we do not need a constitutional amendment to do our job” and calling it “unnecessary.”

    Let’s just remind everybody that today marks the 810th day since the U.S. Senate last passed a budget, balanced or unbalanced, and this debate is taking place in the context of a $14 trillion-and-growing debt. Hardly the picture of responsible and balanced governance. Choosing to Tax, Spend and Waste is not an option.

    The Senate can amend Cut, Cap and Balance as it sees fit and pass it back to the House if it wants to. Dismissing it offhand as an empty, dead-on-arrival act belies the urgency of the debt ceiling rhetoric.

    In a divided government, legislators cannot wait until the media declares consensus to hold votes. One chamber has proposed and passed a budget this year – The House. That same chamber should now lead the charge to reform government spending and responsibly raise the debt ceiling. Waiting until there are no options left but bad ones would be even more symbolic of a broken government.

    You can follow Mike Gonzalez on Twitter @Gundisalvus

    Posted in Economics [slideshow_deploy]

    10 Responses to House Can Lead the Way

    1. Morningdance says:

      Like Wimpy from the Popeye cartoon, liberals seek to barter tax increases in the present for undefined promises of future spending cuts. No deal. Cut, cap and balance is a well crafted bill to ensure that our government operates within its means and deserves congressional support.

    2. George Colgrove, VA says:

      I can go along with Obama, but he may not like why. The supreme court has already addressed this matter. The wrongly applied case:

      Perry vs. United States (1935)
      Challenged the Roosevelt administration's repudiation of a gold clause in the US Bond.

      From Rush Limbaugh (7/11/11)
      "What it does perhaps does do – based on one Supreme Court case – is require the Treasury department to prioritize payment of existing debt to bond holders over other spending in the event that the debt ceiling isn't raised. So, if the government finds itself short on cash it has to keep paying the bond holders, and then find the necessary savings in some other part of the budget. This is exactly what will happen if we don't raise the debt ceiling." Limbaugh (7/11/11)

    3. George Colgrove, VA says:

      There cannot be and default if the debt ceiling is not raised. The Supreme Court has already defined the process. Bondholders are paid first, and then whatever spending priorities are made is paid next.

      All the republicans need to do is hold the current debt ceiling as is – do not raise it and we are there. Cond holders get paid and teh rest of government needs to start making priorities. Then ax the stuff that fell at the bottom of the list. Too bad they didn't start this months ago!

    4. Pingback: La Cámara de Representantes puede marcar la pauta a seguir | Heritage Libertad

    5. Gary says:

      Yes, we can pay the interest on the debt, but where does the rest of the money, to pay salaries, fund DoD, etc come from. Are you assuming that paying the debt will all bond buyers, treasury bill buyers, to proceed to give us more money which we will need to continue to operate the government?

      • Steve says:

        It comes from the federal government's monthly tax receipts of about $200 Billion. The monthly interest due to debt holders is about $20 Billion. Without incurring any new debt, "we" can continue to spend $180 Billion per month without defaulting on any debt obligations. Maybe we can scrape by.

      • George Colgrove, VA says:

        Like Adm Mike Mullen said, the DoD will need to start prioritizing how it spends scarcer dollars. We may need to get rid of the jobs programs created by the DoD. We may need to get rid of the make work, the overspending, the elaborate BRAC projects on the design desks. We may want to consolidate all payroll into one service then contract it out. We may want to take every duplicate federal program and consolodate. We may want to REDUCE federal salaries to be more in line with the private sector. We may want to get rid of waste and any corruption that is bleeding money away. There is a lot we can do to cut cost and stay within recieved tax revenue. We did it once. From 1998 to 2001 we not only balanced the budget, but we also paid off some debt. We can do it again. But mond you 40% of the government is unfunded. If we increase the debt limit, 40% of the goverment will still be unfunded. We need to cut 40% to have a fully funded government.

    6. sam says:

      Will the debt ever be repaid that is the question. If not who decides? Could it ever be repaid? Certain debt will not be repaid. Refute or default is very much the question.

      • George Colgrove, VA says:

        At this point we would need to cut 40% of government just to reach a balanced budget. This will not allow for principal payments. To pay off $14.5 trillion at the customary 4% interest, it will take over 50 years if we start just by paying a pawltry $180 billion each year – which requires even more cuts to the budget. Many non-political economist have already declared the debt unsustainable.

    7. sam says:

      We should explain why comments were censured. FYI : When a partisan is engaged in a dispute He cares nothing about the rights of the question. Please try to understand. We are all Partisan! You too.

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