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Three Magic Tricks Washington May Try to “Solve” the Debt Crisis

Posted By Josh Shepherd On October 9, 2013 @ 5:25 pm In Capitol Hill,Economics | Comments Disabled

Newscom [1]

Newscom

Yesterday in a press conference regarding the national debt, President Obama stated [2]: “There is no magic wand that allows us to wish away the chaos.”

This is true, especially when one considers America’s massive debt [3] and its long-term consequences.

However, as Congress and the President (finally) begin to grapple with the debt limit, we’ve heard leaders in both parties offer a variety of gimmicks to avoid the choices they face.

Call them “magic tricks” that seem to make problems vanish with sleight-of-hand. Yet the debt time bomb will remain without decisive action, threatening America’s future.

1. Imbalance of Powers Illusion

House Minority Leader Nancy Pelosi (D–CA) floated a proposal [4] that denies that Congress has any involvement in matters of spending and debt—contrary to the U.S. Constitution:

The California Democrat argues that the 14th Amendment empowers the president to hike the debt limit without congressional support.

“I think the 14th Amendment covers it. The president and I have a disagreement in that regard, I guess,” Pelosi told reporters in the Capitol. “I would never have taken that off the table.”

In an extensive report, Heritage expert Andrew Grossman reveals the truth [5]:

The President has no more unilateral power to issue new debt on the credit of the United States than he has to collect taxes or make expenditures that have not been enacted by Congress. To claim such a power would be unprecedented, unconstitutional, and absurd.

Moreover, the affront to the Congress’s rightful prerogatives would be serious, even for those seeking to avoid the hard work of putting the federal budget in order.

Article I, Sections 8 and 9 of the U.S. Constitution [6] clearly explain that Congress—in particular, the House—serves as the final arbiter over government spending.

2. Super Debt Suspension

Once the audience knows the secret of a magician’s trick, he usually shies away from using it again.

Yet just months after Congress used debt suspension to “invisibly” raise the debt by $300 billion, chatter continues about trying to do the same thing again. Heritage expert Romina Boccia explains [7]:

Congress and the President last suspended the debt ceiling from February 4, 2013, through May 18, 2013, adding $300 billion to the national debt in less than four months. Their only request was that the Senate produce a budget for the first time in four years, which it did. No savings were accomplished.

Suspending the debt limit through December 31, 2014, as some Republicans are suggesting, would add an approximate $1.1 trillion to the debt—for a total increase in the debt ceiling of $1.4 trillion in less than two years.

As a new Heritage fact sheet notes [8], suspending the debt is less transparent to the American people. It allows Members of Congress to avoid debate on the specific dollar amount increase in the debt limit, making their vote politically much easier to cast.

This time, we can see right through it.

3. Executive Escape Hatch

Bloomberg reports [9] on a more shocking development:

Senate Democrats could introduce legislation as soon as today that gives President Barack Obama the authority to raise the debt ceiling unless two-thirds of Congress disapproves, according to a Senate Democratic aide.…

The strategy could make it easier to gain Republican votes because no Republican would have to vote directly for a debt-ceiling increase.

It’s a dramatic move, except our nation would still be in the dangerous spending-and-debt predicament where we started. Foreseeing this strategy of debt-limit delegation to the President, Boccia explained in a recent report [10]:

In doing so, Congress would effectively surrender its authority over the debt limit and its ability to exercise the power of the purse in making vital course corrections when confronted with the results of unsustainable spending decisions.

Rather than telling Wall Street investors that they should be panicked [11], which is hardly responsible, both the Obama Administration and Congress should begin serious discussions together about cutting wasteful spending and fixing broken, soon-to-be-bankrupt entitlement programs.

Budget-busting entitlements drive the national debt, with Obamacare already shaping up to be another monster program [12]. So start there.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2013/10/09/three-magic-tricks-washington-may-try-to-solve-the-debt-crisis/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/obama-cry.jpg

[2] President Obama stated: http://stream.wsj.com/story/campaign-2012-continuous-coverage/SS-2-9156/SS-2-349264/

[3] America’s massive debt: http://blog.heritage.org/2013/06/17/morning-bell-17-reasons-the-17-trillion-debt-is-still-a-big-deal/

[4] floated a proposal: http://thehill.com/homenews/house/324689-pelosi-obama-shouldnt-have-ruled-out-14th-amendment-option-in-debt-fight

[5] Heritage expert Andrew Grossman reveals the truth: http://www.heritage.org/research/reports/2011/07/the-fourteenth-amendment-is-no-blank-check-for-debt-increases

[6] Article I, Sections 8 and 9 of the U.S. Constitution: http://www.heritage.org/constitution/#!/articles/1/essays/67/appropriations-clause

[7] Heritage expert Romina Boccia explains: http://blog.heritage.org/2013/09/25/plan-to-suspend-debt-limit-means-debt-would-rise-to-17-8-trillion

[8] new Heritage fact sheet notes: http://www.heritage.org/research/reports/2013/10/suspending-the-debt-a-license-for-more-wasteful-spending-sources

[9] Bloomberg reports: http://www.bloomberg.com/news/2013-10-07/u-s-senate-democrats-plan-to-introduce-debt-ceiling-increase.html

[10] Boccia explained in a recent report: http://www.heritage.org/research/reports/2013/09/debt-limit-options-and-the-way-forward

[11] telling Wall Street investors that they should be panicked: http://blogs.wsj.com/washwire/2013/10/03/obama-to-investors-please-panic-at-least-a-little-bit/

[12] Obamacare already shaping up to be another monster program: http://www.heritage.org/research/reports/2013/08/obamacares-impact-on-todays-and-tomorrows-taxpayers-an-update

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