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Debt ceiling deal falling through



A wheelbarrow of money to buy a loaf of bread, metaphor for inflation. This is what Obama, with his fiscal cliff plan, threatens us with.

A big debt ceiling deal with trillions of dollars in spending cuts cannot happen, because the two sides are at an impasse.

What was the holdup?

Eric Cantor drops out of debt ceiling talks

Rep. Eric Cantor (R-VA) dropped out of talks for raising the debt ceiling. Photo: US House of Representatives

The Los Angeles Times carried this story from Lisa Mascaro of the Tribune Washington Bureau. Representative John Boehner (R-OH), Speaker of the House, said today that he cannot make a big deal with the White House. The reason: President Obama insists on raising taxes. Boehner then said that he had called the President and suggested that Obama, Boehner, and the other leaders try to make a much smaller deal.

The two sides had talked of cutting $4 trillion from the deficit over ten years. Now, that talk is off.

Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase.

Of course, Vice-President Biden could not reach an agreement. Rep. Eric Cantor (R-VA-7), the Republican Floor Leader, walked out of the talks, and for the same reason: all that the Democrats wanted to do was raise taxes.

The Democrats have said nothing so far.

What happens if the debt ceiling does not rise?

Enough revenue is flowing in to roll over any Treasury bills or notes that fall due, and to pay principal and interest. But the government will have no authority to borrow more money. Then the government will have to decide which programs are important, and which are not.


Ben Johnson at Floyd Reports said today that Republicans in the House talked of drawing up articles of impeachment. They did this after President Obama actually suggested that the 14th Amendment gave him full authority to keep borrowing as much money as he needed to keep all existing programs running. Then yesterday, the President and his advisers backed off from that kind of talk. Johnson suggested that the veiled threat to draw up articles of impeachment backed Obama down.

Any deal to raise the debt ceiling would need at least some Republican support. Many Republicans in the House are already on record against any such rise.

Featured image: a Weimar-era householder wheels a barrow full of nearly worthless Reichsbanknotes to the corner baker to buy a loaf of bread.


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Terry A. Hurlbut has been a student of politics, philosophy, and science for more than 35 years. He is a graduate of Yale College and has served as a physician-level laboratory administrator in a 250-bed community hospital. He also is a serious student of the Bible, is conversant in its two primary original languages, and has followed the creation-science movement closely since 1993.

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We raised the debt ceiling a few times under Bush.

Not a big deal then.


During the two terms of the George W. Bush administration, the debt ceiling was raised 7 times for a net increase of 84% of the level in effect when he took office. He also cut taxes to an unsustainably low level that increased the deficit and never delivered on the promised economic growth that was supposed to justify it.

No complaints from conservatives, including many in Congress today who were in office during those years. then about these policies.

During the Reagan administration, the debt ceiling was raised 18 times for a total increase of 222% compared to when he took office. The tax rates in effect were also higher than today.

Never a complain from conservatives then about Reagan’s fiscal policies, and conservatives who criticize Obama today aren’t attacking the Reagan record either. In fact, calling oneself a “Reagan Republican” is considered a positive to many.

So the Obama administration is proposing trillions in spending cuts to show a good-faith reach towards a realistic deal, and the Republicans are refusing to move on taxes, even to levels lower than in the Reagan years, because ANY tax increase is “off the table”.

That is not a position of leadership – that’s a position of such reckless, grandstanding indifference to the economic welfare of this nation that these people have lost any real credibility as national leaders. What they forget is that they represent the interests of ALL Americans, not just certain special-interests and political groups.

I’m sure in their political calculus they feel that the longer they hold a policy gun to the heads of the White House and Senate they can get more and more concessions, and if the U.S. & global markets start to suffer from their brinkmanship they can blame it on the Democrats for choosing not to pay the ransom.

History takes a longer view, though. We are thirty years past the start of the Reagan Administration, and can measure the ripple effects of how he led. Whether you agreed or disagreed with his policies and choices at the time, the man had a genuine concern for the well-being of this nation. He knew that there are times to draw a hard line and take the heat for it, but more importantly, he knew when a compromise that made true progress was better than reckless harm caused by impractical ideology. He also managed to forge compromises without demonizing his opponents, and was respected for this leadership trait.

What Cantor, Boehner and the House leadership are doing is petty and sad, and thirty years from now we may well look back and mark this summer as the beginning of the national rejection for this style of gamesmanship, with the public demanding real leadership from both parties.

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