With the federal debt ceiling back in the news these days in connection with negotiations over the so-called fiscal cliff, right-wing Republicans find themselves with another golden opportunity to peddle demagoguery to the booboisie.
As I wrote here 16 months ago, lots of people seem to think that raising the debt ceiling would allow the Obama administration to spend more freely, to come up with more programs that will cost taxpayers ever more money.
This myth is fostered by irresponsible rhetoric from Republican politicians who warn against giving the president “a blank check.” That’s a bogus term, but it plays well among the dimwits who don’t understand the first thing about what the debt ceiling is and how it works.
Here’s the real deal:
Raising the debt ceiling only allows the government to pay the bills it already has incurred. It does not allow Obama or anyone else to spend even one penny that Congress has not already appropriated.
Spending bills emanate from the House of Representatives, which currently is controlled by a Republican majority. Obama simply is not free to conjure new spending programs without specific consent of the House (and concurrence by the Senate). To suggest otherwise is to lie to the American people.
But last year, the Republican National Committee went so far as to launch a fundraising effort with a mass-mailing that bore this headline: ”Stop Obama’s Blank Check.” Recepients of the letter were asked to contribute whatever they could spare to the RNC to aid in its efforts to take away that non-existent blank check.
The danger in not raising the debt ceiling when the need arises is that it would result in America defaulting on its financial obligations. The consequences of that would include a lowering of the government’s credit rating and an increase in interest rates, which would make it more difficult for ordinary Americans to buy homes or cars and more difficult for businesses to expand or retool or otherwise take steps to create more jobs.
This time around, Republicans again are up to their old tricks, as we see HERE:
One of the key pieces of the package President Obama put forward yesterday to deal with the so-called “fiscal cliff” is a permanent end to the debt ceiling. It would make increases in the ceiling effectively automatic, subject to a veto by two-thirds of Congress.
This proposal did not just prompt howls of protestations from conservatives — it also produced a remarkable failure amongst politicians and journalists alike to understand the basics of government financing and the Constitution’s separation of powers.
In the Washington Post yesterday, Lori Montgomery called the idea “an effective end to congressional control over the size of the national debt.” Rep. Louie Gohmert (R-TX) railed against it as “a blank check.” Timothy Carney, a journalist for The Washington Examiner, lamented the legislature ceding power to the executive, effectively “castrating” Congress.
Congress has been vested with the power to tax and spend, under Article I Section 8 of the Constitution. Congress passes budgets, which decide how much revenue the government takes in and how much spending goes out. When the Treasury Department issues new debt, it’s merely carrying out the mechanical necessities of Congress’ decisions — because carrying out the law as passed by the legislative branch is the constitutionally mandated job of the executive branch.
But since the early 20th Century, Congress has also kept in place a separate law — the debt ceiling — that places a statutory limit on how much debt the Treasury may issue. That limit has been periodically raised. It is entirely separate from the decisions to tax and spend, which set the country’s debt obligations. As the Government Accountability Office put it: “The debt limit does not control or limit the ability of the federal government to run deficits or incur obligations. Rather, it is a limit on the ability to pay obligations already incurred.”
The President does not have discretionary control over how much the country borrows. Obama’s new proposal gives him no such control. It would merely make hikes in the ceiling automatic, in accordance with the debt necessitated by budgets Congress has already passed.
Rather than a blank check, Congress has been handing the President a check for a certain amount, ordering him to cash it, then threatening to punk him by draining the account before he can reach the bank.