Getty Images
Stanford University's Keith Hennessey, the director of the Bush/Cheney National Economic Council
Stanford University's Keith Hennessey, the director of the Bush/Cheney National Economic Council, concedes in a Wall Street Journal op-ed today that Republicans cannot follow through on their debt-ceiling threats. The political, economic, and electoral consequences would be too severe, he argues.
But Hennessey does not suggest the GOP simply meet its obligations without some strings attached. His plan suggests a series of short-term increases to the debt ceiling, instead of one long-term increase.
[Obama's] obvious goal is to punt the issue past the 2014 midterm election. Yet if he has to ask Congress for a new increase every few months, the spending problem his administration has exacerbated in his first term will dominate the policy agenda -- when he wants to work on other issues.
That brings us to step two, which is for congressional Republicans to offer Mr. Obama a choice. He can have a long-term debt-limit increase if he agrees to cut spending, or he can have repeated, short-term increases without spending cuts. If the president continues to dodge the country's long-term spending problem, the solution is to force him to ask Congress every few months to give him the authority to borrow more while facing questions about why he refuses to restrain spending.
Let's put aside for now the fact that Obama doesn't "refuse" to cut spending; Obama's already cut spending and approved $2.5 trillion in debt reduction. Let's also put aside for now the irony of these complaints from an economist from the Bush/Cheney administration, which made literally no effort to be fiscally sane.
Instead, let's note why a system in which the debt-ceiling needs to be raised "every few months" -- as even House Speaker John Boehner and Paul Ryan have suggested -- is a very bad idea.
As an economic matter, it's in the United States' interest to reassure markets and investors that we will continue to pay our bills. Having a conversation about default is incredibly dangerous; having several conversations a year about default is hopelessly insane.
But I find the politics of this even more peculiar. Hennessey starts from the premise that Congress has no choice but to raise the debt limit (i.e., Republicans can't shoot the hostage). But once that's established, what difference would it make to Obama if Congress has to cast this vote every few months or every two years?
Isn't it more likely Boehner & Co. would be annoying the president less and his own caucus more by bring debt-ceiling votes to the floor every few months?
Leave a Comment:
The Republican will dig in their heels, refuse compromise, we'll crash, then they'll blame Obama.
The use of the words "debt reduction" is a real stretch of the meaning.
The Gods in Washington have agreed not to over spend as much as they have previously decided. President Obama has accomplished a "Future Spending Reduction" and does absolutely nothing for the current debt or deficit.
Spinnnnnnnnnnnnnnnnnnnnnnnnn
So if he reduced the deficit by about 300 billion over his first term then you would be lying right? That is to say that there is little implication that you don't know what you are talking about in your statement above so the average person reading your words could assume you are knowledgeable. After all someone who doesn't know but assumes uses words like "I think" and "It could be" to qualify their statement, but you state those things as fact as if you know beyond a shadow of doubt. So if you were wrong it would be a lie, right?
What the heck, lets just cut to the chase and call a pig a pig. You are lying, he did cut the deficit by about $300 billion over the first term. You have nothing to stand on because you voted for the party that spent all that money on two wars and Medicare part D, and you applauded them, called Bush a great leader, and probably have a "Miss me now" bumper sticker on your rusty old 70's Nova. You have nothing to stand on so you lie to the rest of us just like you lie to yourself every time you vote Republican.
If you must know, we consider ourselves pretty Independent, socially liberal and fiscally conservative. What I like to call Politically Bi-Polar. My wife and I actually withheld our vote for President this time, as I presume many did seeing the count, because we felt both candidates would do exactly as this administration. They are all spend masters and use smoke and mirrors to explain to the public.
The reduction in the deficit in President Obama's first term was due mostly to the increase in revenues from the improvement in the economy, not spending cuts.
Why do people resort to name calling and accusations when they hear something they don't like?
A little homework is in order.
PS: I regrettably gave up my Vega in the late 80's.
Well you know as much as we talk about Bush spending or Obama spending we're all lying to ourselves since it's the congress' job to control the budget. This all just gives the executive more powers it shouldn't have but at this point that seems inevitable
The primary has to be the economy not the debt, that's the longterm not the the most immediate concern. No matter whether anyone likes it or not the fed will not operate for a good long time without borrowing and there is indeed no way to change that. Anyone who thinks otherwise is being more idealistic than realistic.
How low on the IQ test did he have to score to become Director of the Bush/Cheney National Economic Council? How far Stanford University has fallen...
John Blutarsky... Bluto... He is at Stanford?
No, according to the "where are they now" at the end of Animal House, Bluto became Senator John Blutarsky.
Continuing the "truther" meme about default I see. Sorry people the US cannot, and will not default on it's debt payments. Everybody else? Well Congress giveth, and Congress taketh away. If Democrats can't learn to be financially responsible, they'll have to go into "timeout" until they do. Repeatedly.
Are you delusional? Clinton left a surplus when he left office and Obama inherited a massive deficit and debt as well as a deep recession. Dems controlled only the House for two years. Whose fingerprints are on all of this debt?
Shooter, you are just getting progressively more and more entertaining. I used to enjoy responding to your posts because they were thought out and reasonable. Now I just read them and chuckle.
Correction Blankman - it was a GOTP held Presidency & Congress which:
1) started 2 wars - off the books
2) 2 sets of tax cuts tilted towards the top 2% - again not on the books
3) created the Medicare donut hole which wasn't paid for
4) started the bailout of the financial sector that almost took this nation off the cliff - AGAIN NOT PAID FOR!
SPENDING has decreased under the current President. Now you are entitled to your opinion - but facts are FACTS. Stop living in your bubble!
Zora. You're presenting him with facts. Are you trying to confuse the poor guy? Keep it up.
And he's also ignotring the credit rating companies. They've aready said they will lower the rating if we don't act soon. So it's not just "not defaulting", it's "doing something".
Daniel Patrick Moynihan once said " you are entitled to your own opinion, but not your own facts".
http://moelane.com/2012/06/09/troll-hunting-101/
Well Mike check this chart and you'll get a very good idea whose fingerprints are on all this debt. Bush looks frugal compared to Obama. Which reminds me, Obama has already racked up more debt than Bush, when do you plan to hold Obama responsible? Oh silly me, IOKIYAD.
http://1.bp.blogspot.com/-BWHjHCxKxRU/UJBeztNYbqI/AAAAAAAAHYk/uwFgkWgU7RY/s1600/bush+clinton+bush+obama+deficit+chart.jpg
OK TA I'll bite. What's entertaining about not defaulting?
As for Zero, she's been on ignore for quite some time. Very low information comments.
@Shooter
Your chart is meaningless because Bush did not include his wars in the debt. It is further meaningless since you can trace most of the Obama debt to Bush's actions, including the wars, the recession that started under Bush as he was leaving, the tax cuts and Medicare prescription plan. Context means everything because it explains the numbers.
Sorry Mike but this OMB budget history data agrees with the CBO data, and includes off budget spending. table 1.1. http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/hist.pdf
Meanwhile it was Bush that organized TARP which has been been paid back for the most part. At least according to Obama. Let's also give Robert Rubin credit for his participation in the financial crisis setup. But really, It's been four years since Bush. Obama is going to have to accept responsibility at some point, especially for the now Obama tax cuts, extending the wars, growing Govt. and the welfare state.
You're now getting to the "my invisible friend did it" stage of child-like responses. Maybe you should stick to saying Obama just can't make things better because he doesn't know how.
The debt did not magically appear in in January 2009 which would be Bush's budget anyway. Obama's first budget would be 2010 and he put the Bush's wars back on the books. And BTW those wars cost over One Trillion dollars and the debt from them is still growing. Another significant part of the debt is reduced tax revenues from the recession which started under Bush and continues to this day. In any event, you still haven't explained how we got from a surplus under Clinton to debts and deficits under Bush. It wasn't the Dems spending the money during most of Bush's 8 years.
Shooter would you please list to all of us here since your so positive about it all the "growing govt. and welfare state" that President Obama has signed into law. Please, we're all waiting.
I'll get you started, stimulus in 2009, okay your turn (btw the stimulus is now off the books and not adding to the deficit).
What's the matter Blankman, I hurt your feelings.....Awwwww. Truth & facts hurt, huh? LOL...
How about Obamacare? That's cost me more not less. Food stamps, Medicare, SS Disability, Green energy programs, Escalating the Afghan war, the Libyan war, and of course the Obama vacations with no expense spared.
But, in your favor, the Heritage people have Obama spending less than last year. Must be the House influence. Maybe there's hope after all.
http://www.heritage.org/~/media/Images/Reports/2012/10/sr121/SRfedspendingnumbers2012p11table1.ashx?w=600&h=551&as=1
All government programs cost you money whether you like them or not. I did not like the Iraq War and yet I pay taxes to fund it. That war is going to cost us at least a Trillion dollars in direct and indirect costs. Get over it.
Hennessy assumes that the president is going to negotiate each time he needs the debt ceiling raised. But if Obama says no now, then how likely is it that Obama will say yes in a few months? It seems Hennessy wants the Republicans to bang their heads against a wall many times instead of once. Bad "strategery" on the Republicans part.
Besides, these are Congresses' debts, not Obama's. It is the Congress, not the President, that racked up these bills. That is the way it works. Blaming Obama is just plain stupid.
There are no IQ tests required for representatives in Congress.
Case in point - Michele Bachmann, on the Intelligence Committee...
Not to mention really pissing off main stream voters and annoying their Wall St.backers.
But since these guys are so determined to inflict more pain on the rest of us I guess it's only fitting that doing so means 2014 will be the last we see of them.
And here I was thinking they'd die slowly..
Oh yes please. The Republicans actually seem to think that this is a winning political issue and if they continue to pull this crap every three months that it will be good for them in 2014. Oh please don't throw us in THAT briar patch, Br'er Representative.
I kind of like the short term solution to the debt ceiling. The GOP Tea Party will be reminding voters how idiotic they are every three months!
Can someone give the GOTP a clue - the debt ceiling is about paying the BILLS for the money that has already been SPENT by Congress and now the BILL IS DUE, period!
If the GOTP don't want to raise the debt ceiling then they should stop putting PORK for their districts into the appropriations bills!
The Republican strategy is all about riling up morons with self-righteous indignity. Investors, bankers and foreign governments are supposed to understand that and not panic every time they hear one of these "end of the world" threats.
The photograph underscores the face of the sociopath, devoid of sense and sensibility. Bushies are like that!
This is real simple, each time the Congress passes a budget or a CR it should have a line authorizing an increase in the debt to pay the bills.
It was interesting to me; I followed the link to the Wall Street Journal, and read the whole opinion. I read some of the comments, (there were hundreds at the time). The column, of course was written by a Republican leader, so of course it was filled with lies, half-truths, prevarication and misdirection. I will not bore anyone by enumerating; intelligent people who are informed and who want to, can find them on their own. The interesting thing was the comments. Since it was the WSJ, with a primarily Conservative audience, the bulk of the comments accepted as truth the assertions of Mr. Hennessey. It strikes me that the polarization in this nation is not limited to the political class. The electorate, to a large degree, is also polarized. Large swaths of the people actively limit the information they expose themselves to, and limit, and reject, challenges to their deeply held beliefs. I don't think we have been this divided since the mid-1960s, the civil rights and Viet-Nam era, or perhaps, pre-Civil War.
Over the long term we do need to get the budget under control, but this is totally untenable. If the GOP gets away with this, then our credit rating is going to tank.
We need to face facts. Prior to Reagan, taxes on the rich were 70%. Corporate taxes were 50%. Capital gains were 35%. Prior to Reagan we never had a debt that exceeded 1 trillion dollars.
Reagan cut taxes on the rich by some 50%. Cut corporate taxes dramatically, and cut capital gains taxes just as dramatically. By the time he left office we had accrued nearly 4 trillion dollars in debt.
The Reagan tax cuts have remained in place for the last 30 years, and we now have a debt of 16 trillion. We have to raise taxes, and raise taxes by a lot.
http://www.imagecoast.com/images/alvagoldbook/taxrates.jpg
Sub rosa text from the Right:
"His "kind" are lazy, shiftless, and can't handle money. You have to pay them each day; give them a whole week's paycheck on Friday, and they will go on a bender and not show up for work on Monday. Or Tuesday. Or Wed. . ."
Just a friendly reminder... go and take a look at then Senator Obama's speach to the senate on March 16,2006 to get his views on the debt ceiling.
Wyatt: The "debt ceiling" is not a viewpoint. And as a right winger, you should know a symbolic vote when you see one since your team does them by the hundreds. Pick it up fella...
Hey Ldude,
did you actually go out and find and read his speech from 3/16/2006 ?
well i did and i thought it was very good, that is why i reminded folks to take a look at it.
And i'm not a right winger, you extreme lefty.
They're just trying to lure Obama back into "negotiating" over the debt ceiling. They'll probably concede. It's like putting out honey for a fly.
"Yet if he has to ask Congress for a new increase every few months, the spending problem his administration has exacerbated in his first term will..."
Will... WHAT? Spending problem? Exacerbated? Look you little uberjerk, when you were bouncing on Dick's knee... probably not all that long ago... George and Dick were starting off-the-book wars, and chopping down the tax forest.
Talk about exacerbation... kid, you're blushing... and talk about spending problems... If you'd have been able to stay up late, you'd know where all these problems started.
OH, that's right... you were there. Not too awake apparently, or you'd know. Tell us, the old guys in your party sent YOU out here... they know better, and now they're chuckling.
It's grown up time now... time to start acting like it. Exacerbating... humphhh.
Lovely, so Paul Ryan the "fiscal wonk" is thinking of stressing the whole country out & putting us on the edge of our seats with monthly hostage taking & drama. Wondering if his little gang of obstructionists wilkl pay the country's bills or blow up the economy. Great..