President Barack Obama walked into the East Room of the White House on Monday for his final press conference of his first administration and forcefully threw down the gauntlet at the feet of Republicans in Congress.
With strength in his voice, Obama said, “We are not a deadbeat nation.”
Obama pointed out that raising the debt ceiling does not authorize additional spending; it only guarantees that America will pay for spending to which Congress has already committed. He reminded the world that America does not dine and dash, and he warned Republicans not even to try.
To quote him, “They will not collect a ransom in exchange for not crashing the American economy. The financial well being of the American people is not leverage to be used. The full faith and credit of the United States of America is not a bargaining chip.”
Some Republicans in Congress apparently think it is. Rep. Cathy McMorris Rodgers (R-Wash.), the House Republican Conference Chairwoman, told Politico: “I think it is possible that we would shut down the government to make sure that President Obama understands that we’re serious.”
Treasury Sec. Timothy Geithner recently announced that through “extraordinary measures” our creditors can be held off until mid-February or so before the whole house of cards implodes – which doesn’t leave much time for Republicans in Congress to come to their senses and stop acting like primates who puff all up and make a lot of noise when agitated.
With Monday’s press conference, the president escalated this conflict preemptively, claiming the high ground to magnify the dangers for Republicans should the tea party wing successfully blow up the economy and take all of us down with it. Thankfully, there are a few sensible Republicans still out there. “This is not the normal way forward; this represents a broken system,” said former Republican presidential candidate Gov. Jon Huntsman of Utah.
My guess is that there are enough rational Republicans to shift their next “stand” against Obama from the debt ceiling to the expiration of the sequester, which comes at the end of March. If Republicans decide to make this their Waterloo, it still might lead to a shutdown of the federal government, but at least the world’s economy wouldn’t be torpedoed in the process. And while polls show this will offer only a marginally better outcome for the GOP politically, the catastrophe for all will be smaller.
Despite real evidence to the contrary, Republicans have for decades successfully spun the tall tale that Democrats are reckless, feckless spenders while the GOP is all about smaller government and fiscal conservatism. Neither is true. You might be surprised to know that the president who raised the debt ceiling most often was not a “big spending” Democrat, but in fact the most revered of all modern Republicans, the vaunted Ronald Reagan, who did so 17 times. George H.W. Bush was next, with eight increases in just one term, followed by son George W. Bush with seven. The highest Democrat on the list? That was Bill Clinton, who did so a relatively paltry four times in his two terms.
The irony of this is, we’re having this argument at exactly the moment when the deficit has shrunk at the fastest rate since the Korean War. In December, America’s deficit was $260 million dollars – that’s million, not billion – the lowest monthly total at any point in five years. In Washington terms, that’s as close to a balanced budget as we’ve seen, well, since we actually had a balanced budget.
Which fiscally responsible Republican president was it who last balanced America’s budget?
Bush One? No. The second Bush? Nah, we’re still cleaning up his mess. It must have been Reagan, right? Oops, nope. He ran big deficits. Sorry.
It was actually Bill Clinton. Not only was he the last president to balance a budget, but he also did it four years in a row and left office with a surplus. And do you know who was in charge of the Budget Office during three of those four years? It was Obama’s nominee to replace Geithner as our next Treasury Secretary, his current chief of staff, the wildly uncontroversial Jack Lew.
By the way, my Republican friends, the last president from your party to balance a budget was Dwight D. Eisenhower, in 1956 and 1957.
Boy, how facts can be a nuisance. Here’s another one:
For the first three months of fiscal 2013, the federal government has actually seen a rapidly shrinking deficit, so in many ways we are chasing a vanishing problem. Obama has already trimmed $1.4 trillion and added $600 trillion in revenue (by returning tax rates for those who make over $400,000 annually to Clinton-era rates).
Yes, I recognize that government overspends, and more cuts need to be made, but they shouldn’t be the exclusive burden of the middle class. Let’s balance them from other sources – things like a bloated defense budget that is larger than the next 13 countries combined, or silly subsidies to oil companies that have achieved record profits while America has floundered. And yes, by reforming a tax code riddled with loopholes and special waivers.
Few people realize that because of historically low interest rates, America is in reality paying less interest on our debt today than at any point during the prior three administrations, and while rates will surely go up as the economy continues to improve, it is likely to be several years before rates return to pre-Bush apocalypse levels.
Therefore, I support Obama’s logic that we can borrow more now (30 years at 3 percent terms) so that we can invest in job creation and other programs designed to get the unemployed back to work and accelerate the economy, and in turn generate greater revenues, thereby allowing us to reduce the debt faster.
Getting there, though, will take one long, big fight with Congress. On Monday, Obama filed notice that he’s ready.
John Zaring describes himself as a reformed Republican turned moderate Democrat who believes democracy works best when its government actually functions because its leaders are working together. He serves on the Castaic Area Town Council’s Land Use Committee, Castaic Middle School’s Site Council, the Hart District’s WiSH Education Foundation, and he is the West Ranch High School representative on the Hart District’s Advisory Council. A self-proclaimed “New Democrat” a la Bill Clinton, he lives in Castaic with his wife of 21 years and their daughters, Fiona, 16, and Kylie, 12. His commentary publishes Tuesdays.
Throwing Down the Debt Gauntlet | Commentary by John Zaring
