As has been thoroughly documented, until 2011 no political party had both the votes and the intent to block an increase in the U.S. debt ceiling, thereby triggering both a U.S. default and a global economic catastrophe. Now, despite plummeting annual federal budget deficits, a stabilization of the debt as a percentage of the U.S. economy and his own admission that default would produce "a financial disaster, not only for our country but for the worldwide economy," Speaker John Boehner and his House GOP allies are once again planning to hold the once-routine debt ceiling increase hostage. Their price this time? Enacting large parts of the Ryan GOP budget repeatedly rejected by the Senate, the President--and the voters.
You read that right. This fall, House Republicans plan to drop the so-called "Boehner rule" which demanded dollar-for-dollar spending cuts in exchange for increases in the debt limit. But with the rebounding economy, new tax revenue and $2.5 trillion in spending cuts having led Boehner to acknowledge in March that "we have no immediate debt crisis," the GOP ransom note will become a Chinese menu. And as the National Journal recently reported, all of President Obama's choices will be from the draconian GOP budget authored by Paul Ryan:
This menu is more a matrix of politically fraught options for the Obama administration to consider: Go small on cuts and get a short extension of the debt ceiling. Go big - by agreeing to privatize Social Security, for example - and get a deal that will raise the ceiling for the rest of Obama's term...
It is based on what's known as the Ryan budget, according to Rep. Tom Price, a far-right spending plan passed by the House that's been written off by Democrats as nothing more than a political document that decimates support for the poor and hurts the middle class. And it will outline what Obama will have to agree to for whatever length extension he wants.
For a long-term deal, one that gives Treasury borrowing authority for three-and-a-half years, Obama would have to agree to premium support. The plan to privatize Medicare, perhaps the most controversial aspect of the Ryan budget, is the holy grail for conservatives who say major deficit-reduction can only be achieved by making this type of cut to mandatory spending. "If the president wants to go big, there's a big idea," said Rep. Steve Scalise, chairman of the Republican Study Committee.
For a medium-sized increase in the debt-limit, Republicans want Obama to agree to cut spending in the SNAP food stamp program, block-grant Medicaid, or tinker with chained CPI.
For a smaller increase, there is talk of means-testing Social Security, for example, or ending certain agricultural subsidies.
Predictably, the media have largely forgotten that until the new House Republican majority took over in 2011, the debt ceiling was routinely raised by both parties.
Over 40 times since 1980, including 17 times under Ronald Reagan (who tripled the national debt) and another seven under President George W. Bush (who nearly doubled it again), the borrowing authority was boosted. And as it turns out, the current GOP leadership team including John Boehner, Mitch McConnell and Eric Cantor voted a combined 19 times to bump the debt limit $4 trillion during Bush's tenure. (That vote tally included a "clean" debt ceiling increase in 2004, backed by 98 current House Republicans and 31 sitting GOP Senators.)
Of course, they had to. After all, the two unfunded wars in Afghanistan and Iraq, the budget-busting Bush tax cuts of 2001 and 2003 (the first war-time tax cut in modern U.S. history) and the Medicare prescription drug program drained the U.S. Treasury and doubled the national debt by 2009. As the Center on Budget and Policy Priorities concluded two years ago, the Bush tax cuts accounted for half of the deficits during his tenure, and if made fully permanent, over the next decade would have cost the U.S. Treasury more than Iraq, Afghanistan, the recession, TARP and the stimulus--combined. And Mitch McConnell, John Boehner and Eric Cantor voted for all of it.
But that was then and this is now. And now a Democrat is sitting in the Oval Office and House Republicans have taken the unprecedented step of holding the government's borrowing authority hostage in exchange for enacting their budget. As Senate Minority Leader McConnell made clear in August 2011, "it's a hostage that's worth ransoming."