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Of all the Home Rule reforms pushed through by the conservative rabble-rousers last week, arguably the most significant was the promise that Republicans will not pass an increase in the debt ceiling until major budget process reforms and spending cuts are secured.
The need for such a regulation seems self-evident. Debt has increased by about $4 trillion in just two years. Treasury bonds totaled 13 numbers or $1.4 trillion last year. Without fiscal reforms, we could easily see a decade adding another $10 trillion to the debt. And don’t forget that every one percentage point increase in Fed interest rates will add well over $1 trillion to debt over the next decade.
So budget hawks and those worried about our national debt should welcome this commitment.
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Barely. Instead, President Joe Biden, Senate Majority Leader Chuck Schumer, and the entire special-interest community in Washington collectively let out a primal scream that if there’s even a hint that the debt limit will expire this summer, we’re going to face economic Armageddon. The New York Times previously hyperventilated that “breaking the debt ceiling would result in a first-ever default by the United States and cause financial chaos in the global economy. It would also force American officials to choose between continuing assistance like Social Security checks or paying interest on the country’s debt.”
This is reverse logic. The nation’s good credit standing on global capital markets will not be jeopardized if a debt ceiling is not breached. The much greater danger is that Congress will raise the debt ceiling, but without reforms in the way Congress is grossly overspending.
We’ve seen only one painful effect of runaway government spending and debt over the past year: runaway inflation, which has soared to a 40-year high – costing the average American family nearly $4,000 in real wages.
The government’s addiction to red ink is not due to insufficient tax revenues. The Congressional Budget Office just reported this week that the United States government will take in a record $4.9 trillion in 2022 from Americans. As a percentage of our GDP, that was very close to an all-time record high.
But Biden and congressional Democrats say they want a “clean” debt ceiling — with no strings attached.
Republicans should say “No Deal” to that. The experience of the past 40 years definitely shows that the only time fiscal conservatives have won major concessions on spending reform from Democrats as a condition of raising the debt ceiling. These are “unto Jesus moments” for budgetary discipline.
In 1985, the Gramm-Rudman deficit ceilings were enacted as part of the Debt Act; put congressional spending on a diet. In 1996, on the eve of a vote on the debt ceiling, Congressional Republicans and the Democratic President signed a historic budget agreement. Three years later, the budget was balanced for three years in a row – the only time we haven’t had a deficit in the last 50 years. Then, in 2011, House Republicans used the debt ceiling vote to get President Barack Obama’s approval of the Budget Control Act, which included automatic spending cuts, and cut the deficit significantly.
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The lesson is clear: If we are to make any progress in easing the debt crisis, House Speaker Kevin McCarthy must use the debt ceiling vote as a bargaining chip to push for spending cuts and reforms.
This is being hailed by the Inside-the-Beltway crowd as grossly irresponsible – like holding the country hostage. Wait. When an entrepreneur has millions of dollars in debt and goes to the bank for a loan or a credit card extension, the bank will rightly say, What is your financial plan for getting out of debt? If there is no plan, they throw the owner out with no credit and no credit card extension.
We all hope it doesn’t come to that, but if for some reason stubborn Democrats refuse to back down and the debt ceiling isn’t raised in time, it won’t result in a debt default. Rather, it immediately prohibits Congress from borrowing more money. It can still spend the tax money that flows into the state coffers every day – but not a cent more. Republicans are working on a contingency plan that will ensure debt payments are made and Social Security checks are a top priority. But other low-priority programs — like the Department of Education, foreign aid, energy programs, etc. — will be shut down until an agreement is reached. There is no default — unless Biden’s Treasury Department allows a default.
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Republicans in the House of Representatives can argue that almost all of the increase in debt over the past two years is because Biden and Congressional Democrats have increased the debt by spending $4 trillion we don’t have — most of these issues were made with few, if any, Republican votes. The Democrats are behind this debt hike.
But if Republicans agree to go along with it by raising the debt ceiling without concessions from Democrats, they will support and endorse Biden’s big government socialism agenda. And that, ladies and gentlemen, would be America’s biggest financial crisis ever.
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https://www.foxnews.com/opinion/house-republicans-right-no-debt-limit-increase-until-balanced-budget-plan-is-in-place Debt ceiling vote could save America if House Republicans are willing to stand against Democrats