In a Time of Universal Deceit, Telling the Truth is Revolutionary.
Friday, June 21, 2024

Must Congress raise debt limit?

Treasury Secretary Jack Lew.  (AP Photo/J. Scott Applewhite, File)
Treasury Secretary Jack Lew. (AP Photo/J. Scott Applewhite, File)

Congress needs to raise the debt limit and take away the “cloud of uncertainty” about the nation’s ability to pay its bills, Treasury Secretary Jack Lew said in an interview broadcast Sunday.

“The fight over the debt limit in 2011 hurt the economy, even though, in the end, we saw an extension of the debt limit. We saw confidence fall, and it hurt the economy,” Lew said on NBC’s “Meet The Press.” :Congress needs to do its job. It needs to finish its work on appropriation bills. It needs to pass a debt limit.”

Senior lawmakers on Capitol Hill are trying to come up with must-do legislation to keep federal agencies running after Sept. 30 and prevent the possibility of a government shutdown. At issue is what is normally routine: a plug-the-gap measure to fund the government for a few weeks or months until a deal can be worked out on appropriations bills giving agencies their operating budgets for the full 2014 fiscal year, which begins Oct. 1.

However, some Democrats don’t want to vote to continue to fund the government at new, lower levels mandated by the automatic, across-the-board spending cuts known as sequestration. And some conservatives are making a last stand against President Barack Obama’s new health care law. In addition, Senate Democrats are resistant to a $20 billion spending cut sought by many Republicans.

The issue has divided Republicans between those who think it’s appropriate to use the threat of a government shutdown as a negotiating tactic, and those who don’t.

Rep. Peter King, R.-N.Y., said Republicans should be searching for ways to de-fund or repeal the Obama health care act. But he called threatening to shut down the government “terror politics” and said the strategy wouldn’t work. Others have worried that the gamesmanship could cause Republicans to lose control of the House.

Some observers say it’s an idea doomed to fail anyway, since Obama brings both a veto pen and the White House podium to the battle.

“We should not be closing down the government under any circumstances,” King said Sunday on CNN’s “State of the Union.”

Sen. Mike Lee, R-Utah, has taken just that tack, rounding up fellow conservatives to pledge to oppose any budget extension that funds implementation of the health care law. Sunday, he said it was unfair to implement a law that many Americans don’t want and that still has wrinkles that need to be ironed out.

“I understand that there’s some in the Washington establishment, some from both political parties, that weren’t happy with me over this,” Lee said on “Fox News Sunday.” ”And in this instance, I’m going to take that as a compliment, an indication that I’m doing something right.”

“The fact is that we can delay this bill,” he added. “And if we can delay it, we can stop its consequences, at least for now.”

Lew maintains that the president won’t negotiate over the debt limit.

“The mere fact of negotiating over the debt limit, after 2011, would introduce this notion that somehow there’s a question about whether or not we’re going to pay our bills, whether or not we’re going to protect the full faith and credit of the United States,” Lew said on ABC’s “This Week with George Stephanopoulos.” ”Well, it’s not OK to default. Congress can’t let us default.”

“(Congress) has to stop looking for what’s the last possible moment,” Lew told “Fox News Sunday.” ”They should get back after they take their time off in August and they should finish their work and get it done so that there’s no uncertainty about America’s ability to pay its bills.”

Separately, Lew said no federal bailout is in the works for the city of Detroit, which recently filed for bankruptcy protection. Pressed as to why the government chose to bail out big banks, the auto industry and others, but isn’t assisting the city, Lew said on CNN’s “State of the Union” that the government has been giving Detroit technical advice and has made resources available to help take down blighted properties through federal programs.

But Lew said that the situation during the financial crisis that warranted the other bailouts was “unique,” and that the current problems that Detroit has with its creditors, “it’s going to have to work out with its creditors.”

Copyright  © 2013 The Associated Press. All rights reserved.

Copyright  © 2013 Capitol Hill Blue

Enhanced by Zemanta

2 thoughts on “Must Congress raise debt limit?”

  1. ”Well, it’s not OK to default. Congress can’t let us default.”

    It is no surprise, but Jack Lew is lying here. Congress not raising the debt limit does NOT equal default. It only stops borrowing money. There is still plenty of revenue to service its loan obligations. It would just have to cut spending on programs.

    Congress not raising the debt limit is the equivalent of no longer borrowing money from your credit cards. If you stop charging your credit card do you get a phone call asking you why you are defaulting? I didn’t think so.

  2. Clearly, if nothing else, what this now looming financial crisis is again showing us is that our once proud nation…something our founding fathers set up as a “Federal Constitutional Republic” with its various built in checks and balances designed primarily to prevent absolute tyranny from a fanatical King…simply doesn’t work when it comes to tackling major structural and fiscal change in the modern era.

    Unfortunately, in many ways our constitutional system of government has now become something of a “straight jacket” where a highly vocal political minority…any minority…can very effectively block the efforts of the elected majority and thereby bring the nation to the point where absolutely NOTHING gets done.

    Right now, our country is a mess with a crumbling infrastructure, systemic and cultural decay, a horribly out of control “Terrorist Industrial Complex” and ballooning deficits that only politicians making extremely unpopular choices can effectively address.

    Yet, so far, all we’ve gotten out of Washington is more hot air and finger pointing. Perhaps that’s largely because, under our Constitutional Republic form of government, the elected majority cannot effectively rule because the “checks and balances” in our Constitutional system very effectively prevent it.

    I find it interesting that our friends to the north (in Canada) faced a ballooning debt situation very similar to ours back in the 1970s and 1980s. At that time, their government’s debt was soaring under the socialist “tax and spend” policies of the Trudeau and Maloney eras.

    But it took a clear (would you believe LIBERAL?) majority government in the 1990s under the able leadership of Jacques Chretien and his Minister of Finance Paul Martin to ram through a massive program of sweeping fiscal reforms (which included steep tax increases as well as significant cuts in government spending) all done in an attempt to once again bring the country’s books back into balance.

    Needless to say, at the time, those reforms were DEEPLY unpopular with the majority of Canadians.

    However, because Chretien had a clear majority under Canada’s Parliamentary form of government (a system based largely on British Parliamentary rule) he was able to ram through these long-needed reforms and ultimately get the job done.

    In short, because there are NO built-in systemic “checks and balances” designed to dilute and temper the majority’s rule in the Canadian system, Chretien was able to overcome the strong objections of numerous minorities for the overall long-term good of the country.

    The result today is that the Government of Canada now has one of the LOWEST debt to income ratios on the planet. And their banking system remains one of the strongest on the planet as well.

    Indeed, two of the 10 strongest private banks in the world are Canadian. And, while Canada DID suffer economic turmoil in the economic downturn of 2008 and 2009, what they went through was NOTHING compared to the economic misery the USA went through at the time…and in many ways is STILL going through.

    What’s more, unlike the USA, Standard and Poors has once again awarded the Government of Canada a “AAA” credit rating thanks to its ever-dwindling government debt.

    So, rather than blaming our economic problems on too many do-nothing politicians in Washington, perhaps what we in the USA are REALLY suffering from these days is “too much democracy”.

Comments are closed.