T-Paw’s Sound Advice: Don’t Raise the Debt Limit
With President Hu Jintao of China in the U.S. for a state visit former Governor of Minnesota Tim Pawlenty took to the pages of the Wall St. Journal and the Washington Post to argue against raising the debt limit. Hopefully, our largest creditor was able to find the time amid all the pomp of lavish dinners, joint press conferences etc. that entail a state visit to read them. I believe he may have been pleasantly surprised to learn there is a voice in America calling to get our fiscal house in order and to do so responsibly.
From T-Paw’s Washington Post Op-ed:
But the Obama administration is offering a false choice between more debt and default. The chaos that unfolded when Greece risked default last summer can and should be avoided here without raising the debt limit this spring. There is a better option available.
Contrary to what many people are saying, when the national debt approaches the limit set by Congress, as it could by March, it will not mean that the federal government suddenly won’t be able to pay its bills. In fact, the government has enough projected cash flow and other resources to pay its outside debt obligations on time and in full for much longer – at least several more months – than the administration has been letting on.
Default on such debt need not occur if Congress passes and the president signs a law directing the Treasury to sequence our spending and prioritize the payment of interest and principal on the debt, as well as other critical budget items such as the military
After exposing the Obama administration’s rhetoric of “catasrophic” consequences if we don’t raise the debt limit above $14.3 trillion, $3.4 trillion of which occured on Obama’s watch as false, he then provides a realistic plan to work within our current debt limit. How can we know it’s realistic? Because in his eight years as governor, he did just that:
When I was elected governor in 2002, Minnesota faced a historic budget deficit. Recognizing that taxes were too high already, we used priority budgeting to cut spending. From 1960 to 2002, state spending in Minnesota had increased by an average of 21 percent every two years. During my two terms in office, we lowered the growth of spending to about 1.5 percent per year.
It wasn’t easy. We had government shutdowns, special legislative sessions, numerous lawsuits and one of the longest transit strikes in American history. It was a battle, but we changed the state’s spending pattern dramatically.
This is the choice America faces: more record spending and debt or finally taking the painful steps to get our economic house in order. According to a poll by CBS News the American public supports Pawlenty’s position:
Most Americans believe the massive federal budget deficit is a very serious problem that will create hardships for future generations, according to a new CBS News/New York Times poll.
Sixty-four percent say they are very concerned the deficit will create hardship in the future, and another 26 percent are somewhat concerned. Just eight percent say they are not concerned.
Fifty-six percent say the deficit needs immediate action, while 38 percent say efforts to address the deficit can wait until the economy has improved. Republicans and independents were more likely to push to deal with the deficit now, while Democrats were more likely to say it can wait.
Americans strongly prefer cutting spending to raising taxes to reduce the federal deficit. While 77 percent prefer to cut spending, just nine percent call for raising taxes. Another nine percent want to do both. …The most popular ideas for reducing the deficit are to reduce Social Security benefits for the wealthy, reduce the money allocated to projects in their own community, reduce farm subsidies and reduce defense spending. More than 50 percent supported reductions in each of those programs. …Forty-seven percent say it will be necessary to cut programs that benefit people like them to reduce the deficit.
Sadly, the Wall St. Journal reports that President Obama still isn’t listening to the American people:
President Barack Obama will call for new government spending on infrastructure, education and research in his State of the Union address Tuesday, sharpening his response to Republicans in Congress who are demanding deep budget cuts, people familiar with the speech said.
Mr. Obama will argue that the U.S., even while trying to reduce its budget deficit, must make targeted investments to foster job growth and boost U.S. competitiveness in the world economy. The new spending could include initiatives aimed at building the renewable-energy sector—which received billions of dollars in stimulus funding—and rebuilding roads to improve transportation, people familiar with the matter said. Money to restructure the No Child Left Behind law’s testing mandates and institute more competitive grants also could be included.
He’s still following the marching orders of his union allies that donated millions to his campaign. From the Hill:
Working Americans are waiting on President Obama to lay out a bold plan for investing in jobs and infrastructure, a top labor leader will warn Wednesday.
AFL-CIO President Richard Trumka is set to lay down a marker for the Obama administration ahead of next week’s State of the Union address by urging the president to lean on expansive spending initiatives to fuel the economic recovery.
The AFL-CIO leader’s been a consistent voice for more spending, a request that had been frustrated over the past two years by Republican opposition in Congress. Now that the GOP controls the House, getting approval for more spending will become even more difficult.
Republicans shouldn’t cave to the demands of a president and party that continue to protect their cronie’s interests at American taxpayers expense. I give the final word to likely presidential candidate Pawlenty:
Last year’s midterm elections demonstrated that the public is eager to cut the deficit. But every program has an interest group that will fight hard to defend it. We can succeed only if lawmakers are given no other choice. That’s why it is so important that we use the debt limit debate to force hard choices now.