Will The GOP Raise The Debt Ceiling?

By Justin Gardner | Related entries in Economy, Legislation

Looks like the new batch of Republicans are already signaling that they’ll refuse to raise the debt ceiling… even though John Boehner is telling them they must.

From WSJ:

[...] on Thursday, Minority Leader John Boehner (R., Ohio) said he’s been talking to the newly elected GOP lawmakers about the need to raise the federal debt ceiling when it comes up early next year.

“I’ve made it pretty clear to them that as we get into next year, it’s pretty clear that Congress is going to have to deal with this,” Mr. Boehner, who is slated to become House speaker in January, told reporters.

“We’re going to have to deal with it as adults,” he said, in what apparently are his most explicit comments to date. “Whether we like it or not, the federal government has obligations and we have obligations on our part.”

Why is this so important?

If an increase in the current debt limit of $14.3 trillion does not pass, it would suggest the country may not meet its obligations and would shake the financial system. It could rock the bond market, rattle the dollar and scare away foreign buyers of U.S. debt.

It’s one thing to win an election with a lot of incendiary rhetoric. It’s another thing to actually get things done. And it appears that the new members of the GOP are determined to make obstructionism their bread and butter.

Here’s a taste of what some said during their campaigns…

The campaign of Rep.-elect Kristi Noem (R., S.D.) attacked Democratic Rep. Stephanie Herseth Sandlin for voting to raise the debt limit. Rep.-elect Tim Scott (R., S.C.), who like Ms. Noem is joining the House Republican leadership, reiterated Friday that he wouldn’t vote to raise the ceiling.

In February, Republican Reid Ribble blasted Rep. Steve Kagen (D., Wis.), whom he defeated, for voting to increase the debt limit, calling it “unconscionable” and “insane.” He added, “Congressman Kagen is on notice that the people of northeastern Wisconsin are watching and we are outraged.”

Similarly, Rep.-elect Steve Stivers (R., Ohio) blasted Democratic Rep. Mary Jo Kilroy for voting to raise the debt ceiling. “That shows a reckless desire to spend money we don’t have, and borrow money we can’t afford to pay back,” he said.

Rep.-elect Lou Barletta (R., Pa.) cited the raising of the debt limit during the campaign in saying that “Congress and the president are spending our country into servitude.”

So what’s the solution? Well, at least one GOPer is floating the idea of tying a debt ceiling vote to repeal of some of the recent health care legislation. Since we all know that won’t happen…what’s next? Conditional on extension of the Bush tax cuts? Again, seems like a loser when it comes to public perception of not wanting to raise our debt and yet approving unfunded tax cuts for very wealthy people.

What do you think the solution is going to be?


This entry was posted on Friday, November 19th, 2010 and is filed under Economy, Legislation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

9 Responses to “Will The GOP Raise The Debt Ceiling?”

  1. Trescml Says:

    Watch what Eric Cantor has to say on this. I think on an issue like this he is a good sign of how the battle will be fought. He seems to be taking a wait and see approach so far. At a minimum I see there being strings attached such as tax cuts if they are not already done, or budget cuts. Worst case it can’t get passed until Congress sees what the impact is (or what the Chinese decide the impact should be since they own so much of the debt).

    It’s not like Democrats are looking to avoid this fight since they could likely get an increase through Congress now.

    Being obstructionist has served the Republicans well, and I think this will be direction they take. They really have little to lose since if the bond market does go south and take the economy down, it doesn’t make people more likely to vote for Obama in 2012.

  2. Alistair Says:

    Trescml:

    Translation make Obama a one term President.

  3. daniel noe Says:

    If the republicans don’t make good on their obstructionist promises, I have a feeling ammunition sales will skyrocket.

  4. Wickedways Says:

    “”"public perception of not wanting to raise our debt and yet approving unfunded tax cuts for very wealthy people.’’’’’

    If you follow this post you will find that Im actually backing and supporting raising taxes on the rich….not lowering them as Im sure you will think being as how I confessed to being a fiscal conservative.

    So lets see the richs tax bracket goes to 39.6 percent from 35 percent.

    Okay top 5 percent of the income earners paid 58.72 percent of all taxes into the federal coffers.

    That amounted to 1,246,614,000,000. Dollahs…..Source….The federal government.

    If we multiply 59 percent times 1,246,614,000 dollahs we come up with what portion of that income tax was paid by the top 5 percent.

    or…

    The top 5 percent of wage earners paid 735,514,000,000 dollars in come tax.

    So if we add 4.6 percent back to the budget by raising their tax rate to 39.6 from 36 percent we see it adds……….

    We see that it adds 338,336,440,000 dollars back to the budget. So were still about 1 trillion short of paying our bills.

    However. Lets actually look at what the Tax Foundation reports.

    The top 5 percent of wage earners paid an average tax of…….

    20.70 Percent.

    The top 1 percent paid and average tax of …………

    23.27 percent.

    So as you can see we are actually taking in less money and raising this tax on the rich is only TOKEN SYMBOLISM for the progressives.

    SOLUTIONS…….

    The Debt Commission actually has the solution, but the progressive screamed bloody murder because it was tax cuts…….

    OH THE HUMANITY THEY CRIED…………

    What is their solution……….

    Cutting the tax rates to 26 percent ON THE TOP FIVE (5%).

    SCUM…cried the left, without listening to the whole report.

    Eliminating all the deductions which would actually raise their taxes from an average of 20.7- 23.2 Percent to 26 percent.

    The top 5-10 percent paid on average a tax of just 12.44 percent. By eliminating all of these loopholes and tax breaks we could easily erase our deficit problems.

    BY CUTTING TAXES>>>>>>>>>BUT eliminating tax deductions that bring their rates from 35 percent down to 12-23 percent.

    Seriously You progressives need to get on the band wagon. Cutting taxes in a way established by the debt commission would actually raise taxes paid on the top 10 percent and you guys could be really happy.

    So could the tea party by forcing our country on the path of fiscal resposibility.

  5. kranky kritter Says:

    This is the is one of those non-issue issues where everyone postures, but in the end it goes the same as it always has. So I won’t really pay any more attention to it than I ever have.

    If the GOP decides to threaten to play chicken with it, the democrats would be stupid to blink. All they have to do is says they’re in favor of a straight narrow vote to raise it in order to avoid upsetting financial markets, that they don’t want to politicize it.

    I also think the democrats are stupid if they don’t send a bill out of the lame duck house to extend the bush tax cuts for all but the top bracket. Republicans will look petty if they’re the ones who let all the tax cuts expire because they insisted on keeping the cuts for the top bracket. They’ve been selling this position as protection of small businesses, not rich Americans. Will they really be able to sell that angle if the issue comes into high relief in a game of brinksmanship? I don’t think it will.

    And I think the debt commission report has, sadly, been a waste of time and money. One can argue it should not have been, that it ought to have been binding, supported, and/or heeded in some form. But it’s clear to me that’s not how it’s going to unfold.

    Its only “use” will be for politicians of both parties to refer to it from time to time as they pick out one particular idea from it that they like, as a way of signaling fiscal seriousness. No one is going to sign on for the whole thing or for any sort of binding effort.

    What we are going to end up needing to do is to elect a majority to congress (probably independents) who WILL be willing to tackle the deficit and be a one-term congressman if necessary, if voting for painful but necessary changes proves deeply unpopular.

  6. Aaron Says:

    @Wickedways: Okay I’m all for fiscal responsibility. How does cutting taxes anywhere reduce the debt?

    Being smart on how you spend your paycheck is always a good thing. Spend on the things you need, save on the ones you don’t. Cutting taxes is like going to your employer/income source and demanding a pay cut.

    I know I’m massively oversimplifying the situation, but I hope my point is coming through. :)

  7. Wickedways Says:

    I guess you just didnt read my post.

    Currently according to the federal government the top 10 percent of wage earners pay an average tax of 12 percent.

    Ridding the tax exemptions that we currently have in place and lowering the tax rate from 35 to 26 percent would increase taxes from 12 percent paid by the top 10 to 26 percent paid.

    Its not the RATES that matter….its whats actually paid.

    Many corporations have a 35 percent tax rate but PAY NOTHING….so it does not matter if their tax rates are 100 percent if you allow them to deduct everything under the sun to pay nothing….

    You could say their tax rates are a 10000000000000000000 percent but if they can deduct everything and pay nothing then their effective tax rate is zero.

    The same holds true for the wealthy right now. Buffet is saying the rich should pay more taxes and I dont agree….Simply reducing the tax rate from 35-26 but making them pay close to that 26 percent would raise revenues….not decrease them.

  8. Chris Says:

    There is no difference in what you are saying however, their effective tax rate goes up either way.

  9. Wickedways Says:

    Huh?

    12 percent with deductions. 26 percent and NO deductions and you think raising taxes from 35 to 39.6 is the same thing?

    You progressives so despise rich people that you can no longer think rationally when the word taxes is mentioned.

    I surrender. I will move along now. Nothing to see at this website.

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