Toomey: We don’t have to raise the debt ceiling

posted at 2:15 pm on April 22, 2011 by Ed Morrissey

If one new member of Congress might be expected to take a firm stand against further government borrowing, it would be former Club for Growth chair Senator Pat Toomey (R-PA).  Toomey fought two Senate campaigns on the issue of fiscal responsibility, winning the second handily in 2010, and brings fiscal-conservative activism to a Congress sorely in need of it. Furthermore, the ground on this issue favors the deficit hawks, as most Americans simply aren’t buying the hysterics about global collapse coming from a White House led by a man who voted against a debt-ceiling increase himself in 2006.

However, in a column today at Real Clear Politics, Toomey explains that while we don’t necessarily have to raise the debt limit, a failure to do so will bring some serious consequences:

Moreover, as the Congressional Research Service has noted, the Treasury secretary himself has the discretion to decide which bills to pay first in the event that a cash flow shortage occurs. Thus, it is he who would have to consciously, and needlessly, choose to default on our debt if the debt ceiling is not promptly raised upon reaching it. It takes a lot of chutzpah to preemptively blame congressional Republicans for a default only he could cause.

To be sure, absent an increase in the debt limit, the resulting sudden, drastic spending cuts would be very disruptive and undesirable. That is why I have always argued that we should raise the debt limit once we have adopted the needed spending cuts and budgeting reforms. But disruptive and undesirable spending cuts are not the same thing as a catastrophic default on our debt.

Toomey argues that the kind of spending reforms needed would work better and less disruptively if managed through serious spending reform.  Furthermore, if Congress refuses to act on the debt ceiling, that puts the executive branch entirely in charge of making spending decisions, an outcome that should worry conservatives.  Better to pass a debt ceiling as part of a comprehensive reform package that keeps Congress in charge of those decisions — but that Congress should not budge until the White House agrees to those reforms:

But, it is clear from the administration’s record over the past two years that it has no interest in cutting spending and instituting structural spending reforms. In fact, the president has expanded the size and cost of government at every turn. This administration is largely populated with people who believe that massive deficit spending cures economic ills. Why would they want to curb spending now?

This is the same administration that gave us an $800 billion stimulus and said that wasn’t enough; the same administration that rammed a massive $1.445 trillion health care bill through Congress; the same administration that recently unveiled a 2012 budget that continues to add $9.47 trillion to our national debt; and the same administration that fought bitterly against very modest spending cuts in the continuing resolution spending bill for this year.

There is simply no reason to believe this administration will agree to any meaningful spending cuts or budget reforms except under pressure. But America desperately needs these reforms, as S&P recently reminded us. Congress must ignore the administration’s scare tactics and refuse to raise the debt limit until the administration agrees to put the federal government on a sustainable fiscal path.

Be sure to read all of what Toomey has to say, especially on the irresponsible rhetoric coming from the White House on the consequences of reaching the debt limit, which Toomey argues is a self-fulfilling prophecy for global panic.  He has this right, though.  Republicans in Congress have a lot of leverage in the debt-ceiling debate, and they should use it to address the issues that cause us to increase that statutory limit in such a manner that we don’t need to do it again.  Obama won’t cut government spending on his own, and he certainly won’t address entitlements in any manner that doesn’t increase government involvement and costs, at least not without getting something he desperately needs in exchange for it.

Who exactly are the extremists in this debate again?  And who are in the mainstream?


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Mark Levin was right about this tool. Repubick.

jawkneemusic on April 22, 2011 at 2:17 PM

I’m sick of these pols telling us we have to borrow more money “or else”. Don’t raise the debt ceiling and force the federal government to balance it’s budget instead. Why is this so damn hard for these hacks to understand?!

jawkneemusic on April 22, 2011 at 2:19 PM

Personally, I think it really should be up to the Executive branch to set spending priorities when the cost of things that the Legislature has authorized exceed the revenues from sources the Legislature has authorized.
Not that I think anyone should trust P.BO to do a good job of it, mind you. I’m just saying it’s a better fit to the core purpose of the Executive branch.

Count to 10 on April 22, 2011 at 2:24 PM

I am still wrestling with the adverse consequences of the government running out of money. Based on what they have done with the funds available…what’s the problem?

percysunshine on April 22, 2011 at 2:26 PM

However, in a column today at Real Clear Politics, Toomey explains that while we don’t necessarily have to raise the debt limit, a failure to do so will bring some serious consequences:

Those serious consequences are the point of not raising the debt ceiling. We have to face them at some point so now is certainly better than later. Hard choices are good.

Furthermore, if Congress refuses to act on the debt ceiling, that puts the executive branch entirely in charge of making spending decisions, an outcome that should worry conservatives. Better to pass a debt ceiling as part of a comprehensive reform package that keeps Congress in charge of those decisions — but that Congress should not budge until the White House agrees to those reforms:

This is why Democrats don’t take conservatives seriously. We argue away the only leverage we have and then are shocked when the Democrats call our bluff.

We did the same with the fake budget deal by refusing to consider a government shutdown.

Let the Democrats make the choices about what gets cut and what doesn’t. That will illustrate like nothing else where their priorities are and most Americans won’t much like a lot of those choices.

sharrukin on April 22, 2011 at 2:30 PM

One important note, however, is that, if the Treasury Secretary gets to say who gets payed first when the treasury has insufficient funds, it puts a lot of power in his hands. If it ends up happening, he needs to be watched like a hawk.
On the other hand, it would reset the baseline to a balanced budget, and kick Congress in the direction of taking that power away from him by actually passing a balanced budget.

Count to 10 on April 22, 2011 at 2:32 PM

If there were actually going to be a disaster of some kind, the debt ceiling could also be raised by tiny 1% increments.

If we’re going to demand and get spending cuts every time it needs to be raised, then lets have that fight every week until the budget is balanced.

Kohath on April 22, 2011 at 2:34 PM

Rush is saying the GOp Congress is going with the approach that the GOP will go with long term fiscal isues and vote to allow the debt limit to go up.

THEY ARE KICKING THE CAN DOWN THE ROAD!

unseen on April 22, 2011 at 2:38 PM

correct me if I’m wrong but if we get REAL spending cuts won’t the need to raise the credit limit go away?

unseen on April 22, 2011 at 2:39 PM

Don’t raise the debt ceiling and force the federal government to balance it’s budget instead. Why is this so damn hard for these hacks to understand?!

jawkneemusic on April 22, 2011 at 2:19 PM

+1

El_Terrible on April 22, 2011 at 2:40 PM

correct me if I’m wrong but if we get REAL spending cuts won’t the need to raise the credit limit go away?

unseen on April 22, 2011 at 2:39 PM

As I understand it, our mandatory spending is larger than our revenues, so we could cut all discretionary spending and we’d still be running deficits… so it comes down to reforming entitlements

El_Terrible on April 22, 2011 at 2:42 PM

I don’t even know why we’re worrying about this in the least. Newsflash – failing to increase the debt limit is a bigger deal (by a few orders of magnitude) than shutting down the government was.

Republicans were so afraid of shutting the government down – they broke a promise to the base to kill $100B in spending (which basically amounts to only two weeks out of the fiscal year in deficit spending). In fact, so scared of the ramifications of a shutdown were they – that they compromised to the tune of $38B in cuts – thereby fullfilly only 38 percent of their promise to the base.

Republicans don’t have ANY PROMISE to the base on the debt ceiling – nor is there any generally recognized amount to demand for spending cuts before the debt ceiling is raised.

If the GOP can’t shut down the government for a paltry $100B dollars – if they are too afraid to see a few national parks and museums closed …

There is NO WAY IN HELL they are going to have the stones to hold the line on the debt ceiling – with all the potential ramifications that brings.

That’s the bottom line. And worrying about this is simply a wasteful exercise. Much talk will happen, much kabooki theater will ensue – and in the end, John Boehner and Mitch McConnell will get a few token cuts – and then tell everyone … “It’s the best we can do.”

Bank it.

HondaV65 on April 22, 2011 at 2:44 PM

As I understand it, our mandatory spending is larger than our revenues, so we could cut all discretionary spending and we’d still be running deficits… so it comes down to reforming entitlements

El_Terrible on April 22, 2011 at 2:42 PM

That’s my understanding as well.

Count to 10 on April 22, 2011 at 2:48 PM

I am sadly coming to the realization that all of congress needs to go,(sadly) meaning it is going to be years if ever to get all of them replaced.

ohiobabe on April 22, 2011 at 2:50 PM

Mandatory spending is for those things laid out in the US Constitution. Those do not include SSA, Medicare, Medicaid nor any other entitlement. All of those are discretionary spending that is flexible to Congress.

Mandatory spending uncludes debt maintenance, military, paying the judicial, legislative and executive branch members, USPTO, Mint, Commerce, those parts of Interior dealing with fortification, buildings, etc. as laid out in the Constitution, IRS as part of the taxing authority, GAO as part of the oversight of federal duties, INS, Coast Guard, Border Patrol…

There is an order to spending priorities and what is a granted power comes first and foremost. They are mandatory. All else is discretionary.

Do not raise the debt limit.

For $2 Trillion a year we should be able to run a government to do its mandatory duties.

Americans have been told this system cannot go on forever.

That day is arriving like a freight train: you can stay on the tracks and think of the nice breeze you will get when the train hits you, or you can jump off, take a tumble and hopefully lose no limbs.

ajacksonian on April 22, 2011 at 2:54 PM

As I understand it, our mandatory spending is larger than our revenues, so we could cut all discretionary spending and we’d still be running deficits… so it comes down to reforming entitlements

El_Terrible on April 22, 2011 at 2:42 PM

Ok I understand what you are saying.

unseen on April 22, 2011 at 2:55 PM

So unless we reduce the defeict by $1.5 trillion we will hit the debt limit. thus unless we have a balanced budget will we always need to continue to increase this debt limit. It is a function of running in the red.

thus at red ink of $1.5 trillion a year. the vote to increase the debt limit will be a yearly vote.

unseen on April 22, 2011 at 2:58 PM

So a vote against the debt limit increase would be a vote for a balanced budget. Correct?

So those GOP people like MB and Rand Paul saying they would vote for an increased debt limit if it includes a balanced budget amendment is blowing smoke. Since a No vote on the debt limit increase is a VOTE for a balanced budget.

unseen on April 22, 2011 at 3:00 PM

Mandatory spending is for those things laid out in the US Constitution. Those do not include SSA, Medicare, Medicaid nor any other entitlement. All of those are discretionary spending that is flexible to Congress.

Mandatory spending uncludes debt maintenance, military, paying the judicial, legislative and executive branch members, USPTO, Mint, Commerce, those parts of Interior dealing with fortification, buildings, etc. as laid out in the Constitution, IRS as part of the taxing authority, GAO as part of the oversight of federal duties, INS, Coast Guard, Border Patrol…

There is an order to spending priorities and what is a granted power comes first and foremost. They are mandatory. All else is discretionary.

Do not raise the debt limit.

For $2 Trillion a year we should be able to run a government to do its mandatory duties.

Americans have been told this system cannot go on forever.

That day is arriving like a freight train: you can stay on the tracks and think of the nice breeze you will get when the train hits you, or you can jump off, take a tumble and hopefully lose no limbs.

ajacksonian on April 22, 2011 at 2:54 PM

I’d like to think that, too, but all Defense spending is technically “discretionary”. SS, medicare, and medicaid are the “mandatory” parts (though you could also lump tax credits and deductions in that category, too).

Count to 10 on April 22, 2011 at 3:00 PM

That’s the bottom line. And worrying about this is simply a wasteful exercise. Much talk will happen, much kabooki theater will ensue – and in the end, John Boehner and Mitch McConnell will get a few token cuts – and then tell everyone … “It’s the best we can do.”

Bank it.

HondaV65 on April 22, 2011 at 2:44 PM

I absolutely hate the fact that you are completely right about this. But it is what it is.

thirteen28 on April 22, 2011 at 3:01 PM

The bond and stock markets seem remarkably sanguine about this issue. Apparently no one believes the US will default on its obligations regardless of whether the debt ceiling is raised per schedule or not. I concur.

Financial experts agree: the issue is spending, in particular entitlement spending. How many times do we have to hit ourselves in the head with this anvil before we finally take heed?

SukieTawdry on April 22, 2011 at 3:02 PM

For all those that want a balanced budget amendment. why go through all the hassle of getting it passed in the House and Senate and 3/4th of the states when a simple NO vote on the debt limit increase would do the same thing?

Unless of course the balanced budget amendment is just a fig leaf to appease the voters……

unseen on April 22, 2011 at 3:02 PM

“… which Toomey argues is a self-fulfilling prophecy for global panic.”

Didn’t George Soros just have a retreat which looked into causing this exact same thing…?

Seven Percent Solution on April 22, 2011 at 3:03 PM

To me, mandatory spending is mortgage, taxes, utilities.

To my wife, mandatory spending is Valentines Day, anniversary, birthdays, and Christmas.

To Democrats, mandatory spending is money that goes to their supporters.

pedestrian on April 22, 2011 at 3:05 PM

The bond and stock markets seem remarkably sanguine about this issue. Apparently no one believes the US will default on its obligations regardless of whether the debt ceiling is raised per schedule or not. I concur.

Financial experts agree: the issue is spending, in particular entitlement spending. How many times do we have to hit ourselves in the head with this anvil before we finally take heed?

SukieTawdry on April 22, 2011 at 3:02 PM

I wonder how much the market actually believes the opposite of these warnings of dire consequences. Once spending has been reigned in, economic growth should follow.

Count to 10 on April 22, 2011 at 3:14 PM

To put it a different way, if we don’t raise the debt limit as Timmy wants, will that hand little Bammie a crisis to make the most of? Those in-the-know understand that not raising the debt limit doesn’t mean ‘social security checks won’t go out’, and all that rot. But if little Bammie doesn’t want the checks to go out and he has a willing media, he can stop the checks and blame it on Republicans.

slickwillie2001 on April 22, 2011 at 3:15 PM

The Republicans should increase the pressure with serious and meaningful demands, then go national with a “This is John Galt” speech to educate those in the public who still don’t get it.

GaltBlvnAtty on April 22, 2011 at 3:16 PM

Will the Republicans stand strong and stop the debt ceiling increase or will they continue to be useless “go along and get along” buddies with the crazy spending Democrats?

RJL on April 22, 2011 at 3:22 PM

But if little Bammie doesn’t want the checks to go out and he has a willing media, he can stop the checks and blame it on Republicans.

slickwillie2001 on April 22, 2011 at 3:15 PM

Until you stop reacting to what someone else might do or not do you have no agenda and you can not take the offense. Playing defense your entire politcal career is a no win effort.

unseen on April 22, 2011 at 3:37 PM

To put it a different way, if we don’t raise the debt limit as Timmy wants, will that hand little Bammie a crisis to make the most of? Those in-the-know understand that not raising the debt limit doesn’t mean ‘social security checks won’t go out’, and all that rot. But if little Bammie doesn’t want the checks to go out and he has a willing media, he can stop the checks and blame it on Republicans.

slickwillie2001 on April 22, 2011 at 3:15 PM

If the public opposes raising the debt limit by 2 to 1 as the polls say, wouldn’t the GOP House get “Credit” for not passing one? How is it they will get blamed for doing what the public wants?

KW64 on April 22, 2011 at 4:12 PM

Count to 10 on April 22, 2011 at 3:00 PM

Explain to me how SS is mandatory in light of the 1960 SCOTUS decision that you have no property rights to SS. What we have had is 51 years of lying by congress that they can’t do anything about it. Granted the people may be pi..ed because of the lying and just maybe would seriously tar and feather congress which is really what should happen

chemman on April 22, 2011 at 4:16 PM

I keep puttin’ it out there, so here it is again.

The interest on the existing debt will be more than $1000 per man, woman, and child unless we pay off the existing balance. The government is reacting to this like a junkie, paying only the minimum payment and charging more than the payment every period. They take in $2T every year, and are spending more.

They’re saying that there won’t be any food unless its credit limit is increased. They’re saying that they won’t be making that minimum payment (debt default). They’re saying that all sorts of calamities will occur if the debt limit isn’t increased by gazillions, right now.

Not only shouldn’t the debt limit be increased, it should be decreased for our children, their children, and their grandchildren. At this moment, an infant owes $1000 per year just for interest. When the kid gets out of school, the first thousand dollars that he earns will go to paying off the incredible splurges of today and prior. It won’t go to food, or housing, or savings — it has already been spoken for. He will be a slave to debt.

The current debt is roughly $14T. The debt limit should be decreased by $700B per year, so an infant today will face an unburdened, unhocked, future in 20 years.

cthulhu on April 22, 2011 at 6:14 PM

There comes a time when you just have to cut up ALL credit cards and start living to get out of debt. Reduce the money you spend. This is a concept Politations do not seem to grasp. I sure hope they do better with their personal finances. NO RISE IN DEBT CEILING, TAKE AWAY THE CREDIT CARDS, CUT THE BUDGET TO THE BONE AND CHIP AWAY AT THE BONE. STOP SPENDING PERIOD!!!!

old war horse on April 24, 2011 at 12:40 AM

Explain to me how SS is mandatory in light of the 1960 SCOTUS decision that you have no property rights to SS. What we have had is 51 years of lying by congress that they can’t do anything about it. Granted the people may be pi..ed because of the lying and just maybe would seriously tar and feather congress which is really what should happen

chemman on April 22, 2011 at 4:16 PM

Note the quotes around “discretionary” and “mandatory”. The legal definitions are not the same as common usage, but it could effect what the treasurer is legally allowed to do. For instance, if the treasurer is legally required to pay out all statutory payments like SS, medicare, and medicaid, before paying out anything for the debt (let alone the military), we would be screwed. It might be nice if congress passed a law to sequence obligation payments so that nothing that stupid happens.

Count to 10 on April 24, 2011 at 11:07 AM