The new Congress is now in town and one of the big issues coming up is raising the debt ceiling.
In early 2010, Congress voted to raise the debt ceiling to $14.3 trillion. This means that if government debt rises above that level, the country basically shuts down because the government will be prohibited from borrowing more and will have no way to finance our trillion dollar deficits.
Treasury Secretary Timothy Geithner has urged Congress to act soon to raise the ceiling, and Federal Chairman Ben Bernanke predicts that the $14.3 trillion limit will likely be reached in April. This means D-Day is shortly approaching.
The GOP is threatening to vote against raising the debt ceiling. Republicans argue that the government should cut spending, and are also using the debt-ceiling vote as leverage to get Democrats to compromise on other issues the GOP wants passed, like corporate tax cuts, or repealed, like Obamacare.
There is no argument that we are reaching dangerous levels in the amount of debt the government owes. However, this isn’t the time to play games and threaten a catastrophe if the ceiling isn’t raised.
While the GOP would have the moral right to oppose raising the debt ceiling had they stuck to the platform they were elected on, this hasn’t been the case.
Part of the reason why government debt is supposed to shoot up in the next two years is due to the passage of the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act,” also being called another stimulus bill.
The bill includes tax cuts that the GOP wanted and all the goodies that the Democrats wanted. The bill was opposed by right-leaning groups including the U.S. Chamber of Commerce. The total cost of the bill is expected to be $858 billion.
While the bill likely will give the economy a boost, which could increase government revenue above the $858 billion in costs, in the short term it will clearly increase the deficit.
The GOP can’t vote for measures that will increase the deficit, and then decide to not allow the government to borrow to finance it.
While there are many ways that the government can and must phase out trillions of dollars of spending in the coming decade (including entitlement programs, earmarks and waste), it is unrealistic and unwise to expect these cuts overnight.
If the GOP voted against the “stimulus bill” and refused to raise the debt ceiling, they would be standing by their principles. Now they merely look like hypocrites.
The question still remains to be seen, are we going to get the GOP that will vote for tax cuts no matter what else is in the bill, or will we get the GOP that will balance the budget.
Until then, it looks like the Republicans In Name Only (RINOs) are in charge and not the fiscal conservatives who promised spending cuts and a balanced budget during the campaign.
© 2023 Newsmax Finance. All rights reserved.