The Final Act of Debt Ceiling Drama 2011

by Wendy Simmons | December 30, 2011 10:47 am

While the rest of us are recovering from the holidays and mulling over the best ways to spend our gift cards, the GOP hopefuls are making their final pleas to the citizens in Iowa and New Hampshire.

Just in case they have run out of campaign material, the debt ceiling compromise of summer 2011 is a gift that keeps on giving. President Barack Obama is expected to formally request to raise the debt ceiling again today. While this move should be no surprise, given the terms our dysfunctional Congress agreed to last summer, it will be greeted with political theatrics nonetheless.

While the obstinate Republican freshmen would love to vote against another debt ceiling increase, the timing of Obama’s request should deny them that pleasure. Congress will be allowed 15 days to vote on a resolution of disapproval, which could in turn be vetoed by the president. However, because neither the House nor the Senate are in session until Jan. 17, a resolution will not be introduced.

It is possible, of course, that the leadership of both the House and Senate could summon their colleagues back to work early. Presumably, though, this do-nothing Congress[1] would not be able to accomplish such a feat. It barely passed a middle-class tax cut at Christmastime.

The Republican presidential hopefuls are another story altogether. They are pounding the pavement and the airways hard in Iowa. As the candidates make their final appeals to caucus-goers, Romney, Gingrich and the rest likely will pounce on an opportunity to bash the Obama administration for profligate spending and for legislating during a Congressional recess. Before you buy what they will be selling, let’s review the facts.

First, raising the debt ceiling does not authorize the government to spend more money or “money we don’t have.” It simply allows the government to pay bills that already have been accumulated. If one of us has buyer’s remorse after a holiday shopping spree and refuses to pay our credit card when the bill came due, we would not be reining in our spending. Rather, we’d be sacrificing our credit rating. The American government, by way of its elected legislators, already has bought the product. If we don’t pay the bill, we can’t return our purchase — it simply means the bill isn’t getting paid and our credit rating is downgraded.

Second, Obama is not asking Congress for something it was not expecting. When the debt ceiling discussions were under way last summer, all parties involved knew how much the government would need to keep itself going through the 2012 elections. As part of the agreement, the GOP decided it would be a great idea to give everyone the chance to “disapprove” of the spending, even though they had already agreed to it.

This is golden material for campaign ads. Candidates will be able to proudly display their “conservative” credentials by publicly ranting against the debt ceiling one more time. But when you hear that familiar refrain coming out of Iowa, remember that it is just the same old song being replayed one more time.

Endnotes:
  1. do-nothing Congress: http://investorplace.com/2011/10/why-the-doc-fix-will-be-the-next-casualty-of-the-do-nothing-congress/

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