Alexander's Column

The Debt Bomb Showdown

By Mark Alexander · Feb. 10, 2011

Future Shock Debt Bill

“We must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude.” Thomas Jefferson
This bomb will "fundamentally transform America"

There’s currently a lot of talk about deficits and debt among the new House Republican majority; much of it is contentious intraparty debate about whether to raise the “debt ceiling,” and if so, how to leverage that in order to get Democrats to approve more cuts.

This month, the central government accrued a $223 BILLION record deficit. Republicans are trying to scrape together a few more cuts, but Senate Democrats indicate they will only approve $4.7 billion in additional cuts to the whole year’s expenditures, when what is needed is $4.7 billion in additional cuts every day of the next year.

For the purpose of clarity, let me reiterate a few definitions.

The national budget deficit is the difference between the total spending budget (including interest on debt) authorized by Congress for each year, and total tax receipts. For this fiscal year alone (October 1, 2010, to September 30, 2011), the shortfall is projected to be 1.15 trillion dollars.

The national debt is the total of all outstanding U.S. Treasury obligations held by domestic and foreign individuals, institutions and governments, and is currently 14.05 trillion dollars.

The debt ceiling is the self-imposed limit Congress sets for what it can legally borrow to pay for all the government services that it can’t afford. A year ago, Congress increased that limit to 14.29 trillion dollars. But since Congress has authorized spending almost five billion dollars a day more than it takes in, that debt ceiling will be hit sometime between the end of March and mid-May.

Complicating matters further, the then-Democrat-controlled Congress failed to set a new budget for the current year, instead opting for continuing resolutions (CR) that authorize the prior year’s spending levels. They utilized this budget ruse in order to avoid greater accountability (greater losses) in the midterm election last year. The current CR expires on 4 March, and House Republicans are using that expiration date to force Barack Hussein Obama into budget-cutting submission.

Here is how the key Republican players in this crisis – and it is a crisis – have positioned themselves on the issue of deficits and the debt ceiling.

House Speaker John Boehner notes, “We have to work our will in the House. We have to work with our colleagues in the Senate and put something on the president’s desk. If the president is going to ask us to increase the debt limit, then he’s going to have to be willing to cut up the credit cards. … [Default] would be a financial disaster not only for our country, but for the worldwide economy. Remember, the American people on Election Day said we want to cut spending and we want to create jobs. You can’t create jobs if you default on the federal debt.”

Rep. Austin Scott (R-GA), president of the powerful freshman class of the 112th Congress, adds, “If there is a vote put forward to increase the national debt ceiling and that is all the legislation does, I think it will fail overwhelmingly.”

Budget Committee Chairman Paul Ryan (R-WI) is advancing a budget plan with $32 billion in spending cuts for the current budget year (FY11), well short of the Republican Pledge to America’s “$100 billion in the first year alone.”

But House Majority Leader Eric Cantor (R-VA) explains, “It fulfills the pledge because we said in a year’s time we were going to cut spending by $100 billion. As you know, we are five-twelfths of the way through the fiscal year by the time the expiration occurs. We will be proposing this again in the next fiscal year, and if you look at it on an annualized basis, I assure you it will be over $100 billion.”

It better be!

Rep. Cantor adds, “We are simply not going to accept an increase in the debt limit without serious cuts and reforms. … What we need to do and are committed to doing is making sure that we achieve spending cuts and effect real reforms so that the spending binge ends. We look at the debt limit vote as an opportunity for us to accomplish those goals.”

In the Senate, Tea Party favorite Jim DeMint (R-SC) says that Obama administration claims that holding the debt ceiling at current levels would be “catastrophic” are true only if the administration elects to default on interest and debt obligations.

His Senate colleague Pat Toomey (R-PA) has proposed the Full Faith and Credit Act, which would “require the Treasury to make interest payments on our debt its first priority in the event that the debt ceiling is not raised.” However, Toomey is not prepared to hold the debt ceiling, noting, “Congress should make increasing our debt contingent on immediate cuts in spending and effective reforms of the spending process that helped get us into this mess. We can do so without jeopardizing the full faith and credit of our country – and we should.”

Sen. Rand Paul (R-KY), who along with DeMint is a member of that body’s Tea Party Caucus, has proposed a much more aggressive plan, which cuts $500 billion from the federal budget this year alone. This plan is something of a straw-man target, especially its proposed cuts to defense spending at a time when that budget has been trimmed to limits that increase threats to our frontline warriors.

However, the other domestic spending cuts in Paul’s budget should not be discounted, as those cuts have the overwhelming support of the aforementioned Tea Party, a formidable movement that continues to pick up steam across the nation.

Additionally, Sen. Claire McCaskill (D-MO) and my friend Sen. Bob Corker (R-TN) have introduced a bill to cap federal spending at about 20 percent of the U.S. GDP. That is still a very big budget, but it cuts out more than $8 trillion in spending over the next decade. It is, I believe, an admirable first attempt to establish a cap in a Senate where Republicans are still the minority party.

Of course, for his part, Obama is banking on the assumption that the American people are just too dullard to understand the consequences of the debt bomb he’s dropping on the nation. This bombing mission was launched with the politically fortuitous collapse of the U.S. real estate and securities markets, which Obama rode into office to fulfill his proclamation, “We are fundamentally transforming the United States of America.”

To that end, Obama and his Socialist bourgeoisie will blame Republicans for the hardships – and there will be hardships – associated with moving toward a balanced budget.

Sen. Kent Conrad (D-ND), chairman of the Senate Budget Committee, was the first out of the gate with the Obama memo tactic: “Basically what [Republicans] are saying is ‘pay China first.’ We’re going to forget about the American public and the things that they need? Somehow they’re secondary? And paying the Chinese and the Japanese is the first priority of this country?”

In the debate about raising the debt ceiling, expect Democrats to deploy a plethora of slight variations on that theme.

Continuing his faux charade to somehow appear “Reaganesque,” Obama proposed a paltry $775 million in budget cuts. To put that into perspective, view this budget graphic.

In the coming months, the Obama administration and its Leftmedia sycophants will attempt to perpetuate this obfuscation of the hard facts.

Fortunately, there is a congressional caucus which embodies the Reagan mantle, a group of conservative lawmakers which we have applauded since its inception. That caucus includes most members of the Tea Party caucus.

To sort the wheat from the chaff in the coming budget battles, I recommend you rely on the Republican Study Committee for clarity about which legislation to support, and on the Heritage Foundation for why to support it. Long before the advent of the Tea Party movement, the RSC was dedicated to “a limited and Constitutional role for the federal government, a strong national defense, the protection of individual and property rights, and the preservation of traditional family values.”

(If that sounds familiar, see The Patriot’s mission statement.)

Currently under the chairmanship of Ohio Rep. Jim Jordan, the RSC is our last best defense against detonation of the Obama debt bomb. If more Republicans will honor their oath to abide by our Constitution, as the RSC members endeavor to do, then the nation will avoid the economic catastrophe that looms.

However, if the Left successfully uses their “pay China first and forget about the American public” propaganda to derail the RSC/Republican effort to enact massive deficit and debt reductions, then batten down the hatches. I can assure you that when Obama’s debt bomb detonates, it will completely transform America by breaking the back of free enterprise. The result will be the collapse of the dollar and mass unemployment accompanied by civil unrest. Of course, as I have speculated previously, that scenario comports with Obama’s subversive vision to convert the USA to the USSA.

First Principles and Rule of Law as enshrined in our Constitution must trump propaganda if Liberty is to survive the Obama regime. Unfortunately, too many Republicans can’t articulate the difference between Rule of Law and rule of men, and they legislate accordingly.

In the timeless words of George Washington, “No pecuniary consideration is more urgent, than the regular redemption and discharge of the public debt: on none can delay be more injurious, or an economy of time more valuable.”

I second that motion!

Footnote: The Wall Street Journal reports, “Governors around the U.S. are proposing to balance their states' budgets with a long list of cuts and almost no new taxes, reflecting a goal by politicians from both parties to erase deficits chiefly by shrinking government.” Of course, most governors are required by their state constitutions to balance their budget. It is high time, then, for a balanced budget amendment to our federal Constitution, which the RSC also advocates.

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52 Comments

Bill in Scottsdale said:

The price for raising the debt limit should be the Dept of Education, that is its elimination. The nation got along fine before there was such a federal agency. Why should we send tax dollars to Washington only to have them siphon off much of it for the agency and to return a portion of the funds back to states and communities with federally mandated restrictions? Local parents and school boards can do a much better job.

Thursday, February 10, 2011 at 12:05 PM

Cathy Cloud said:

I usually can applaud your editorials with abandon. But, today, I was surprised to hear you call Sen. Bob Corker a friend. He has disappointed me, as a conservative, at most turns. I am not alone in this opinion. "Bailout Bob" is on every Tea Party list I've seen as a one term Senator.Perhaps you are simply golfing buddies and do not discuss the Fed or the importance of paring down this government while on the links.Respectfully,Cathy Cloud

Thursday, February 10, 2011 at 12:09 PM

The Editor replied:

First, I do not play golf. Second, while Bob and I do not agree on everything, that does not mean we can't agree on anything. The "all or nothing" litmus test is a losing formula for any party, particularly the Tea Party, and The Patriot has been calling of a Tea Party long before the contemporary populist movement got underway. What I can tell you is that Bob is a self-made individual of very high character and faith, a very smart Patriot who is not a typical Beltway egomaniacal politico.

GeoLogan said:

I keep saying to myself, "This presideent evidently knows nothing about fiscal checks and balances. Our problem is deficit, Mr. President. Jobs make money that translate into tax revenue. Investment spending to create job nullifies any revenue generated by taxes. Why can you not understand that? And unemployment assistance will never fix that problem." If I'm not making enough money to sustain my lifestyle, guess what? I either find some way to make more money or I trim my spending. But Mr. Obama's accounting classes in college must have used another textbook than what I had.I know this is simple math, but I've lived by it for almost 75 years, and it still works!

Thursday, February 10, 2011 at 12:10 PM

Cletus said:

Just keep in mind that we would need to trim spending to around 500billion- Rand Paul's plan, to make the cuts necessary to avoid being in default by refusing to raise the debt ceiling. And we would need to do it in less than 6 months.That's impossible.. And reckless. And that's just the current year.70% want to freeze the debt ceiling, true.80% don't want to cut medicare benefits in order to trim spending. Also true.We can't do both.

Thursday, February 10, 2011 at 12:13 PM

Howard Last in Wyoming said:

Before the debt ceiling is increased, every department, bureau, agency, rule, law, regulation, etc. not specifically authorized by the Constitution has to be eliminated or repealed. Probably 90% or better of the budget would be gone. The other two required steps are abolishing the Federal Reserve Board (where is it in the Constitution) and put us back on the gold standard. Of course the republican leadership (still an oxymoron) will have to go, most are wannabe democraps.

Thursday, February 10, 2011 at 12:20 PM

MyNickelsworth in Athens, TN said:

I sent the following to my Representative and Rep. Boehner after I heard his comment 2/10 on Fox News.I heard your interview on Fox News this morning saying that you were working to reduce the budget by $1 Billion. The word I hear is that a deficit for this year is projected to be over $1 Trillion.If you can only cut by $1 billion it will take 1000 years to pay just this years deficit IF there were not interest. We have a debt of somewhere around $14.2 TRILLION. A puny $1 billion reduction would take 14,200 years to pay the debt without any interest. THE NUMBERS SAYS YOU ARE PLAYING AT FIXING THE PROBLEM. WE MUST CUT A MINIMUM OF $500 BILLION THIS YEAR TO EVEN INDICATE THAT WE ARE SERIOUS.I do not understand why Washington cannot understand that this is not politics as usual, this is DEATH to the nation IF we do not get serious. DO YOU WANT THE U.S. TO BE ANOTHER ZIMBABWE??Do you want to pay $500 for a loaf of bread? That is what is ahead if YOU DO NOT GET SERIOUS about CUTS IN SPENDING. PLEASE GET SERIOUS. Cut executive departments of Education, Health & Human Services, Energy, Housing & Urban Development budgets by 50% each. CUT Salaries by 33%, defund all czars. Look into cutting Interior, Agriculture, and Labor by a large amount, shoot for 50%.IF YOU DO NOT GET THIS SERIOUS you are welcomed to the new Zimbabwe and $500 loaves of bread.WE WILL BE WATCHING!YOU will be held responsible for the new Zimbabwe!!!!!!

Thursday, February 10, 2011 at 12:24 PM

Alton Womack in Central Florida said:

The opening quote by Thomas Jefferson as each day by one of our forefathers, reveals something quite amazing by these men. It is my belief after reading their thoughts, these men were not only brilliant but were inspired by God and their words are so relevant today. I called the White House comment line and offered this thought and also that either Mr Obama completely disregards the Constitution or he is a slow learner and has a serious and destructive attitude toward America which will be rectified in the next General Election.

Thursday, February 10, 2011 at 12:29 PM

BrianK in Northwest Arkansas said:

Ok, the first thing that needs to happen is the politicians on BOTH sides of the aisle need to get off the "job creating" hobby-horse. Creating jobs is NOT the gov't's function. The second thing that needs to happen is, those that are truly fiscally and constitutionally conservative are going to have to suck it up, face the music, and start cutting entitlements. The people of this country need to face some music of their own, and realize that the gov't soup bowl is not bottomless. Welfare, social security, Medicare, and Medicaid are a drain on the economy we can no longer afford, quite apart from their constitutionality. It's time to wean people from the government teat.

Thursday, February 10, 2011 at 12:32 PM

Kenneth C. Harrell said:

Budget CutsIt is far past time for federal employees to face up to the fact that they too must learn that their jobs are not a guarantee. If the civilian work force must be cut to enable companies to survive, then it is only logical that the federal work force learns this same lesson.Certain areas of the federal work force will, by necessity, be temporarily exempt, but others must be reduced, and reduced significantly. Members of Congress can address this by immediately reducing their staff. Not only would this be a cost savings in personnel, but it would also reduce the amount of needless bureaucratic paper work involved with the legislative process.The beginnings of staff reductions throughout the federal government would also generate efficiencies in the remaining staff. Everyone would work more efficiently to ensure the safety of their own position, hopefully, exposing yet additional cuts that could be made.Of course, the unions would be screaming bloody murder and threatening slow downs, sick outs, etc.Many states have already begun staff reductions and no state has collapsed due to lack of employees.

Thursday, February 10, 2011 at 12:36 PM

Don said:

All the hoopla by the current congressional leadaers about cutting spending falls by the wayside when it actually affects Congress. Why should they be subject to only a 2% cut in their costs when they want all else to sustain a 9% cut?Seems to me as business as usual.And for god's sake no mention of the first step by making Congress subject to the health care that is mandated for the rest of us.

Thursday, February 10, 2011 at 12:39 PM

Alton Womack in Central Florida said:

GeoLogan I agree with you. Obama is inexperienced, a narcissus and really not as smart as he wants us to believe. He is a talking machine however, but if you really want to understand him read his books, and also one entitled, "Roots of Obama's Rage." He has a grudge to settle and he is accomplishing his agenda. Surrounded by radicals is not surprising, it's in his DNA--it's all he has ever known. But we Americans change these things by elections and it can't come too soon.

Thursday, February 10, 2011 at 12:41 PM

Dean Izett said:

What? Does ANYONE seriously think that cutting $100 billion from the Federal deficit is going to accomplish anything. That's like someone who goes into debt by $14,000 one year saying, "well, next year I'll make sure I only further my debt by $13,000. The Republicans are going to have to draw a much harder line or we are ALL going to be in the dumpster.

Thursday, February 10, 2011 at 12:54 PM

Melody said:

I agree that we do need to vote out Obama, but we will not regain our soveriegn nation until we: end the Federal Reserve, call it quits with the UN, break up the Council on Foreign Relations, stop funding the International Monetary Fund, eliminate all bureaucracy and stop supplying money to socialists governments. I don't like democrats, unfortunately Republicans are the opposite side of the same coin. A fresh start is needed.

Thursday, February 10, 2011 at 1:18 PM

David Telles said:

Why don't the Republicans submit, NOW, a resolution to increase the debt limit and attach an increase in the age one can apply for Social Security as well as low income requirements for Medicare, Medicaid. In otherwords, strike now for fiscal sanity.David Telles

Thursday, February 10, 2011 at 1:22 PM

joe f. said:

It's too bad you litter an otherwise fine piece with your pet hobby horses, namely the "the politically fortuitous collapse of the U.S. real estate and securities markets," and "subversive vision to convert the USA to the USSA" ideas. You might as well say we're running out of money because we're paying hush money to the 9/11 inside-job conspirators and keeping a huge supply of Shapries around to redact Obama's birth certificate. It's particularly odd given your strong bent toward being honorable, because claiming to *know* something that you cannot know -- the truth of what goes on in the President's mind and how it is not what he says or anybody has reported him saying -- used to be called lying and bearing false witness. Nowadays people call it BS, I suppose, and while it may sound like a fitting name, it does not communicate the way "bearing false witness" does. And remember, divining something by dint of your gigantic intellect or unparalleled mastery of grand strategic skullduggery does not qualify as *knowing* something in any actual sense. That's believing or thinking or hallucinating, not knowing, and should be addressed with a qualifier appropriate to your lack of certainty (again, actual certainty, not the "I know in my heart" stuff that propels most of your flights of fancy).Again, it was a good piece otherwise, with a particularly fine quote at the end and strong conclusion. I'm sure you've guessed I have a somewhat liberal social bent, and I'm OK with giving some of my tax dollars to help people. I'm not OK with giving away the tax on wages my young daughter has yet to earn (nor that of the children she has yet to bear, for that matter).

Thursday, February 10, 2011 at 1:27 PM

The Editor replied:

I "divine" nothing when asserting Obama is an ideological Socialist who would, if unabated by wiser minds, reduce the USA to the USSA. I draw my conclusions from his words and deeds prior to being elected to the Senate, and since. I have read his books and studied the records of his associations with Leftist mentors such as Jeremiah Wright, Michael Pfleger, William Ayers, Bernardine Dohrn, Khalid al-Mansour, Rashid Khalidi, Bob Creamer and others. He is a disciple of uber Leftist Saul Alinsky, whose Rules for Radicals is the "bible" of "community organizers." His short record as part time Senator yielded the most radical Left voting record of any Senate member. His record as president as done much the same. Oh, but maybe Obama is now reformed? "Facts are stubborn things; and whatever may be our wishes, our inclination, or the dictates of our passions, they cannot alter the state of facts and evidence." --John Adams