Last year, the Republicans refused to raise the debt ceiling and threatened to cause a double dip recession unless President Obama and the Democrats agreed to a series of deep spending cuts. In the end, a deal to raise the debt ceiling passed by a bi-partisan vote but the GOP's threat to renege on America's financial obligations caused the U.S. to lose its prized Triple A credit rating for the first time in our history. At the time, the Republicans threatened to do it again in the future.
Sometime in December, the debt ceiling will have to be raised again. House Speaker John Boehner is already threatening to hold the U.S. economy hostage again. In a recent speech, Boehner stated:
"We shouldn't dread the debt limit. We should welcome it. It's an action-forcing event in a town that has become infamous for inaction. I put forth the principle that we should not raise the debt ceiling without real spending cuts and reforms that exceed the amount of the debt limit increase ... When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase. This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance."
The key is here that the House Republicans will once again use the looming lapse of the nation's borrowing authority to force further cuts to domestic programs. And Boehner will still be presiding over a majority in the House that's adamantly opposed to raising taxes on anybody by even one thin dime.
Boehner is wrong when he says the only way to address spending and the deficit is threaten the U.S. economy with a double dip recession. If the GOP genuinely believes that spending and the deficit are a serious problem (they don't), they should use the normal legislative process to advance their deficit and spending cut goals. They could hold a series of hearings in the relevant House committees and call economic experts to testify about what they believe to be the best way to reduce spending and the deficit. After those hearings, they could vote the legislation out of committee for a debate on the House floor. Let the American people listen to the debate and make an informed decision about our fiscal future.
However, the Republicans would prefer the reckless and irresponsible path of threatening to default on our obligations. Thankfully, our state and our nation do have more reasonable leaders who understand the dangers of these political games. The Lincoln Journal-Star reports:
Sen. Ben Nelson said Wednesday the partisan obstruction that "put us on the brink of default last year (is) shameful" and may be repeated this year despite warnings that it could push the country into economic recession. "They'll seek to do it again this year," the Democratic senator said, "and it will put the country at risk."
Senator Nelson is correct when he says that defaulting on the nation's obligations would would put the country at risk. If the U.S. defaulted on it's debts, America's credit rating would take another hit and interest rates would soar. Those increased interest rates could cause another recession. This would be an especially bad time for the U.S. to go back into recession since Europe at the present time is in recession and several countries over there have shaky financial situations. The worst thing for the world economy right now would be for the Republicans to force a divisive partisan food fight over raising the debt ceiling that would reduce investor confidence in the U.S.
The Republicans in the Congress should heed Ben Nelson's warnings and raise the debt ceiling in December without a hostage crisis. Lest we not forget, raising the debt ceiling was a routine event during previous Republican presidencies. For example, the debt ceiling was raised 18 times during Reagan's Presidency and 7 times during George W. Bush's Presidency. We Nebraskans should contact our representatives and demand that they do the responsible thing in December and not put the world's economy at risk.