RINO GOP Warn Risks Of Pushing Debt Ceiling Debate Too Far

You cant believe everything Washington say. Democrats wants to debt ceiling raise, but will punt with spending cut. The GOP establishment doesn't want to lose their power and they are dancing with the issue. The Tea Party Conservatives want a shut down. The myth of economical disaster if we don't raise the debt ceiling suggests it is the end of the world. It is a myth and a lie. The revenues we take in as tax is sufficient to pay the debt obligations the government owes. This is the only weapon Conservative have to curb spending. We don't need a scalpel to cut the spending; we need a machete. The market is resilient and will adapt to the change. We have been delaying this for a long time. We need to fix it now or it will be too late down the road.

(Huffingtonpost) All of this is supported by a poll from the Tea Party group FreedomWorks, which found that 69 percent of all voters oppose raising the debt ceiling.

While there is disagreement between Democrats and Republicans over when a default would occur if the government hit the debt ceiling, there is broad bipartisan agreement that such a scenario is undesirable and would likely have dire consequences for the economy and the nation.

So the task for House Speaker John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.) will be to extract significant concessions from President Obama and Democrats in Congress that will not be rejected as a fig leaf by Tea Party activists. Judging from the Tea Party’s scathing reaction to the deal struck in the most recent fight over this year’s budget, that will be a difficult task.

There are three main components to any potential deal that Boehner and McConnell must address.

One is what kind of structural changes to spending can be enacted, such as spending caps for each year's budget. A second is how deeply spending will be cut in the budget for fiscal year 2012, which starts in October. And the third is how high the debt ceiling will be increased from its current $14.3 trillion level, and whether that will last beyond the 2012 election or not.

They must also deal with what are essentially two different Congressional Republican camps.

Many GOP lawmakers are in the conventional wisdom crowd, which says that the debt ceiling has to be raised no matter what. This subset wants to avoid scaring the markets, but they also think the united GOP bloc has substantial leverage and can extract significant spending cut concessions from Democrats.

The second Republican camp is the more hard line conservative group, which appears willing to press their case to the political and economic limit. They will not vote for a debt ceiling increase unless they receive significant concessions.

For Democratic leaders, the narrative is relatively straightforward: The ceiling should be raised promptly, and some limited spending cuts would be appropriate.

In 821 Days, Obama Added $3.7 trillion to the National Debt

Gold at $1500. Dollar at a 15 month low. Gas at $4 a gallon. Food prices rising fast. Over 400,000 unemployment claims per week. 9% unemployment rate. 3 ongoing wars. More people than ever on food stamps. Rising homeless rate. Poverty on the rise. Social security going into the red for the first time. Debt exploding at unprecedented levels. WHEN ARE LIBERALS GOING TO GIVE UP ON THIS CLOWN AND HIS FAILED POLICIES.

It is an opportune time for the GOP stand ground and not allow this government bankrupt this country. Hopefully, the GOP can redeem themselves for caving in and settling for a $38 billion spending cut in the 2011 budget. If the GOP screw up on the debt ceiling, they don't deserve our support in 2012.

(CNSNews.com) - Federal borrowing is on pace to hit the legal limit on the national debt in less than a week.

As set in a law passed by Congress and signed by President Barack Obama on Feb. 12, 2010, the legal limit on the national debt is $14.2940 trillion. As of the close of business Tuesday, according to the Daily Treasury Statement released at 4:00 pm today, the portion of the national debt subject to this legal limit was $ 14.268365 trillion.

This left the U.S. Treasury with the authority to borrow only an additional $25.635 billion before it hits the statutory debt limit.

In fact, in the past six days, the debt has increased at a far faster pace than either the $4.03 billion per day average suggested by Secretary Geithner or the $4.5 billion per day that the Treasury has increased the debt since Obama became president. At the close of business last Wednesday, the debt subject to the limit was $ 14.211984 trillion--or $56.381 less than the debt recorded at the close of business Tuesday.

In other words, in the six days of Thursday, Friday, Saturday, Sunday, Monday, Tuesday, the national debt increased $56.381 billion---or almost $9.4 billion per day.

At that pace, the Treasury would exhaust its $25.635 in remaining borrowing authority in less than 3 days.

U.S. Debt Tops $14.3 Trillion for First Time

The proposed $100 billion in cuts dwindled down to $38 billion after the members of Congress didn't have the "balls" to stand up for what was right. It is power over common sense. The $38 billion in spending cuts just covered the $34.54 billion in interest on the debt. We have a multi-trillion dollar budget. What are we spending on that can't be cut? America is on the verge of bankruptcy if we keep continuing to raise the debt ceiling.

(CNSNews.com) - The national debt has passed another historical milestone, topping $14.3 trillion for the first time ever, according to data released by the U.S. Treasury late Monday afternoon.

When the Treasury opened for business on Friday, April 15, according to the Treasury’s Bureau of the Public Debt, the national debt stood at $14.27 trillion ($14,270,792,119,184.89). By the close of business Friday, the debt had climbed to $14.31 trillion ($14,305,336,580,992.11), an increase of $34.54 billion ($34,544,461,807.22).

Friday’s $34.54-billion jump in the national debt almost equaled the $38.5 billion the Republican House leadership said would be cut from spending for the remainder of this fiscal year by the continuing resolution that the Congress passed on Thursday and President Obama signed Friday.

The federal government is now perilously close to hitting its legal limit on debt.

GOP TEA PARTY WILL FILIBUSTER NATIONAL DEBT CEILING

Raising the ceiling debt will not curb the governments thrist for spending. CUT SPENDING! Debunking a popular myth, not raising the debt ceiling will stop any further spending by the government. The obligation to the interest on our debt will still be paid by the revenues collected by taxes. In fact, the high gas prices is a nice source of tax revenues to the teasury. We need to get serious with our spending before it is too late. By putting it off, we will continue to have the same discussion.

(Politico) The Senate’s Tea Party Caucus will face a tough decision when it comes time to vote to raise the national debt limit: Fall in line behind Republican leadership or go rogue.

The founding members of the new caucus – freshman Sens. Mike Lee (R-Utah) and Rand Paul (R-Ky.) and second-term Sen. Jim DeMint (R-S.C.) – are each considering whether to mount a filibuster to block an increase of the $14.3 trillion national debt ceiling.

But Senate Minority Leader Mitch McConnell (R-Ky.) and his leadership team are quietly voicing concerns about a filibuster, saying their preferred strategy is to force Democrats to find 51 votes among themselves, so they can be solely responsible for raising the national borrowing limit. Since 60 votes would be needed to overcome a filibuster, at least seven Republicans would have to ultimately back a debt limit hike if the party didn’t want to take the blame for forcing a default on the nation’s creditors – which would badly muddy the political message.

The vote, which carries both tangible and political consequences, will be a test of how far the fiercely conservative tea party senators are willing to take their purist ideology.

Obama regrets vote against raising debt limit

If the president actually sat and listen to the debates and stop voting present most of the time, he would understood what the bills were about. Ironically, it is comical that raising the debt ceiling crisis is imperative from a president who voted against it as a senator.

(Yahoo) WASHINGTON – The White House said Monday that President Barack Obama regrets his vote as a senator in 2006 against raising the debt limit — the same kind of increase he's now pressuring Congress to approve.

Obama "thinks it was a mistake," presidential spokesman Jay Carney told reporters. "He realizes now that raising the debt ceiling is so important to the health of this economy and the global economy that it is not a vote that, even when you are protesting an administration's policies, you can play around with."

The country will reach its debt limit of $14.3 trillion by May 16. If Congress doesn't raise it by then or shortly thereafter, the government would not be able to make debt payments, leading to an unprecedented default of the national debt and driving up borrowing costs for the government, U.S. companies and consumers, the Treasury Department warns.

Dont Let Government Scare You To Raise the Debt Ceiling. It is Bogus

Ronald Reagan said, “Government is the problem, not the solution.” That statement speaks volumes and it is share by many Americans, especially the Tea Party Movement. Republicans and Democrats are guilty for not telling the truth. We are one week away till we meet our maximum debt ceiling. The media, Republicans, and the Democrat are claiming an eventual shutdown in the government. That is nonesence. It will mean public employees may see a delay in their paycheck. It will also mean that Congress cannot create any new debt, which is good. With the revenues collected from the tax payers, there is enough money to pay our interest debt obligations, including Social Security.




The Obama Administration says, “Failure to raise debt limit quickly could cripple US.”

but,

(Tucson Citizen) The Reason Foundation, a libertarian, free-market think tank takes a different view:

The statutory debt limit, or debt ceiling, was designed to control congressional spending by limiting the amount of debt the federal government could accumulate. Clearly, it has not fulfilled its legislative purpose. In fact, the government has lost its ability to monitor its own spending. Having to raise the debt ceiling yet again is a sign that Congress has failed to do what is necessary to get the nation’s finances in order. Here are three myths about the debt ceiling, each one rebutted by a fact.

Myth 1: Failure to increase the debt ceiling is insanity. Unless we increase the debt ceiling, the U.S. government will default on its debt.

Fact 1: The federal government has other options. If the debt ceiling is not increased, the Treasury Department can make interest and debt payment its first priority to avoid a default. Then it can essentially put the government on a stringent pay-as-you-go basis.

The Obama administration warns of an economic armageddon if Congress doesn’t raise the debt ceiling. It is called “insanity” not to take the simple step of allowing the government to borrow more money. Treasury Secretary Timothy Geithner has warned that if we don’t increase the debt ceiling the U.S. would default, resulting in a bond market crash with disastrous impacts felt at home and abroad.

Technically, if the debt nears its statutory limit, the Treasury Department cannot issue new debt to manage short-term cash flows or manage the annual deficit—the government may therefore be unable to pay its bills. But in the real world things are different.

First, if the debt ceiling is not increased it doesn’t mean the federal government will have to repay the entire debt at once. The government just won’t be able to increase its borrowing. Americans understand the difference between not being able to borrow more money and defaulting on one’s mortgage.

Also, while Congress has never before refused to raise the debt ceiling, it has frequently taken its time about doing so. In 1985, for example, Congress waited nearly three months after the debt limit was reached before it authorized a permanent increase. In 1995, four and a half months passed between the time that the government hit its statutory limit and the time Congress acted. And in 2002, Congress delayed raising the debt ceiling for three months. It took three months to raise the debt limit back in 1985 as well. In none of those cases did the world end.

More importantly, the Treasury Department has other options. For instance, if the debt ceiling is not increased, the Treasury can prioritize interest and debt payment to avoid a default.

If Congress refuses to raise the debt ceiling, the federal government will still have more than enough money to fully service the debt. This year, for instance, about 6.1 percent of all projected federal expenditures will go to interest on the debt, and tax revenue is projected to cover about 60.1 percent of all government expenditures. With roughly 10 times more income than needed to honor its debt obligations, why would the government ever default?

Let’s sum it up: As long as the government continues to pay interest on the debt, then it technically is not in default. With tax revenues expected to be $2.2 trillion, interest payments amount to roughly $300 billion—this would still leave $1.9 trillion in revenues to pay for the government’s most important priorities. For instance, lawmakers could decide to honor the promises made to people benefiting from entitlement spending, such as Social Security, Medicare, and Medicaid. In that case, even after paying for all of the entitlement spending, the Treasury would still have $300 billion left.

Would that involve cuts in government spending? Absolutely. But it could, and should, be done.

Would it make the bond market nervous? Yes, it would. Not raising the debt ceiling would probably introduce additional uncertainty. However, market participants (especially foreign creditors who now own a majority of our debt held by the public) may have already changed their expectations due to the increased attention to this issue and because of the alarmist language being used by the Treasury and White House.

With some signs of life—such as increases in consumer spending—we could expect declines in demand for Treasury and fixed-income assets. However, the Federal Reserve is still actively purchasing notes, which will likely increase demand. Ultimately, it makes predictions on the effect of interest rates very tricky.

One thing is certain: not increasing the debt ceiling will make us travel to a new equilibrium, which almost always means a certain level of disruption in the short term. But shouldn’t such change be the easiest way to mitigate short-term concerns while moving to a more sustainable long-term equilibrium?

Those who are worried about default should realize that our ability to remain solvent depends on our continued commitment and ability to pay the interest on our debt, not on our willingness to raise the debt ceiling. As long as we continue to run deficits, our ability to borrow money cheaply, with low interest rates, is the key to avoiding default.

This could change if investors become worried about their chances of getting paid back. In that case, they might find some safer or more profitable place to invest their capital than the United States government. Also, they may demand an increase in the interest rate for the money they lend. Either of these changes could result if the U.S. government’s reputation as a conscientious debtor is called into question by a continued increase in the demand for funds.

The bottom line is that the government must make serious changes to the way it spends and borrows money, it must stop paying the interest on the debt by borrowing additional money, and it must stop making benefit promises it will never be able to deliver.

Both Moody’s and Standard & Poor’s have warned that our credit rating will be reduced unless we get a handle on our national debt. We’ve heard a lot recently about the European debt crisis, but, as one senior Chinese banking official recently noted, in some ways the U.S. financial position is more perilous than Europe’s. “We should be clear in our minds that the fiscal situation in the United States is much worse than in Europe,” he recently told reporters. “In one or two years, when the European debt situation stabilizes, [the] attention of financial markets will definitely shift to the United States. At that time, U.S. Treasury bonds and the dollar will experience considerable declines.”

Myth 2: These are extraordinary times. We need to increase the debt ceiling now and will cut spending later.

Fact 2: In the last 10 years, Congress has raised the debt ceiling 10 times, sometimes twice in the same year. Congress has raised the debt ceiling 98 times since 1940. The government has lost its ability to monitor its spending. Having to raise the debt ceiling again is a sign that Congress has failed to do what is necessary to get the nation’s finances in order.

Myth 3: Democrats are the big spenders and are the party of debt. We know this because they now want to increase the debt ceiling while Republicans oppose the increase.

Fact 3: Historically, the party in power always wants to increase spending. As a result, lawmakers in power—regardless of party affiliation—overwhelmingly vote to increase the debt limit.

In conclusion, the data presented above reveals that the debt limit, far from providing fiscal discipline, has in fact served only as a symbolic cap that Congress, regardless of the party in power, will simply push higher and higher as spending increases dictate.

If We Reach the Debt Ceiling and Dont Extend, the Government has Enough Money to Cover What We Owe

The rhetoric by Obama and Congress that we must extend the debt ceiling is completely bogus. Since the media enjoys interchanging debt ceiling and default without scrutiny, there is a big difference between the two terms. This confusion is making many Americans antsy. The main thing is that when we reach the debt ceiling, in the next couple weeks, life will continue without the dramatic "the sky is falling." The only changes that we will see is that Congress will not be able to create more debt, and public employees may see a delay in their paychecks. But the more important to note, USA will be able to pay the interest on our debt obligations. Also, the USA will not default. Don't believe the hype from the media and from Washington.

(The New American) At this moment the national debt, according to the U.S. National Debt Clock, is at $14.094 trillion and increasing by $4 billion every day. With the current ceiling on the U.S. National Debt at $14.294 trillion, there are just 49 days left until U.S. government spending hits the ceiling. Expect the noisy chorus of misinformed warnings about the consequences of such an action to rise as well.

The new Speaker of the House, John Boehner, explained on Fox News that the Republicans would push for spending cuts regardless of the imminent coming of the debt ceiling, and he was then pilloried by a Fox News writer. Boehner said:

If the president is going to ask us to increase the debt limit, then he’s going to have to be willing to cut up the credit cards. I think our team has been listening to the American people. They want us to reduce spending, and there is no limit to the amount of spending that we’re willing to cut.

Just because the bank has pulled the credit cards from the government (to expand on Boehner’s analogy) doesn’t mean the government won’t have the money to continue making the minimum payments, as noted by newly elected Senator Pat Toomey (R-Pa.) during an interview with Neil Cavuto:

The debt service, [the] interest on our debt, is about 6 percent of everything the federal government has to pay. So we would be taking in enough revenue to cover more than 10 times all the interest we owe. There is no reason we would have to default on our interest obligations….

Now, there are vendors who would have to wait to be paid. There are probably employees of the federal government who would have to wait to get paid. This [would result in] lots of dislocation. I am not suggesting that this is a desirable path, but I am suggesting that we have to get serious about getting our budget under control.