Christian Debt Recovery

Senate Debt Ceiling Vote

April 24th, 2011 |

Author: Gavin

senate debt ceiling vote

Eric Cantor–The Man with his Finger on the Plunger

On Monday, July 11th, shortly after President Obama’s nationally televised news conference on raising the debt ceiling while reducing the deficit—the stock market plunged 150 points. This sharp drop was a dramatic reminder of the reality that a failure to raise the debt ceiling would be a knock-out punch to America’s already staggering economy.

The odds of that actually happening rose sharply when during this past weekend, House Speaker John Boehner broke off negotiations with President Obama, not because of any
personal disagreement on his part but rather because he failed to gain any Republican support that would support a fiscal “grand bargain” that would include higher tax revenues. That places House Majority Leader Eric Cantor (R-VA) in charge of GOP negotiating strategy—and in the limelight.

Even though they are both Republicans John Boehner and Eric Cantor represent the new look of the GOP and they are at the political extremities of what defines Republicans today.
Boehner has the notion that his voters sent him to Washington, DC to solve challenges. Cantor however is a faithful lightening rod for fueling the Tea Party’s anti-Washington wrath. Rather than develop a strategy of compromise and shared sacrifices, a formula that will ultimately reduce America’s debts, he has been a tireless supporter of the Tea Party’s “total zero” dogma on taxes.

Tea Partier Eric Cantor can accept the closing of tax loopholes just as long as every red cent saved goes into reducing tax rates. On the so-called issue of entitlements, most House Republicans last week opposed even modest efforts to trim defense spending. So in essence, Cantor’s stance to his President is that Democrats agree to cut domestic programs by about $2 trillion now and we will vote to raise the debt ceiling by that exact amount and then, only then, will we start reducing entitlement programs across the board.

Such a deal! Since no Democrat worth his weight in ticker tape would ever accept such a one-sided bargain, it is hard to avoid the conclusion that House Republicans actually want our country to plunge further into economic crisis. As I listened to their rhetoric and read the response to President Obama’s July 11th news conference, I wondered if the Tea Partiers really hate President Obama and taxes that much or if they are not trying to purposefully foster economic catastrophe by adopting the old Bolshevik slogan: “the worse the better.”

In contrast to the GOP’s stubbornness on taxes, the president has appeared reasonable, flexible and persistent in attempting to get Republicans to just say yes. In a true conciliatory manner, the President has also shocked many Democrats by offering to cut $3 in federal spending for every $1 in new revenue. Obama understands that lowering tax rates is acceptable, as long as some revenue is left over for cutting deficits and last week even sent chills down the collective spines of the Democratic Party by offering to put entitlement reforms on the table—now!

By spitting on the President’s outstretched hand, the GOP as a whole and the Tea Party in particular seem to be totally possessed by twin demons.

The first is that Americans are suffering from tax burdens that would make any of the Roman emperors pale in comparison. The reality is that the collection of federal taxes has fallen
to 15 percent of GDP, just below its usual average of 19 percent.

The second demon causing the Republican Party’s head to spin all the way around is that failing to raise the debt ceiling would have no negative repercussions on our economy. This past Sunday, on FOX News Sunday, Senator Jim DeMint accused Secretary Tim Geithner of trying to scare Republicans into making a bad deal. “Secretary Geithner has been irresponsible. He’s playing Chicken Little here. The fact that we will pay our debts if it’s the last dollar we have…We’re not going to default.”

Senator DeMint’s logic twists and turns its way to the conclusion that since tax revenues are sufficient to pay 55-60 percent of what the Federal Government spends that there will be more than enough money to honor our commitment to foreign creditors. Of course, there will not be enough to finance federal programs, but nobody will miss them anyway. This of course is flawed logic because there are plenty of Americans who will miss those federal programs: Social Security recipients, whose checks go out August 3rd; military personnel, other federal employees, and the three million families who live in assisted housing all across America—just to name a few.

When the public backlash comes—and it will come, Republicans will not be able to say they weren’t warned. This past Sunday on NBC’s Meet the Press, the Treasury Secretary made
it very clear. “Remember, we have to borrow now 40 cents for every dollar we spend… And every week starting the week of August 2, we have to go out and finance roughly $100
billion in maturing obligations of the government. We make 80 million checks a month to Americans, 55 million people on Social Security benefits, millions more Americans on veterans’ benefits, Medicare, Medicaid, people who supply our troops in combat. Eighty million checks a month.”

The imponderable here is the markets’ reaction to a failure to lift the debt ceiling. There’s a serious risk of higher interest rates, plunging confidence in the dollar and an even deeper freeze on job-creating investments in the U.S. economy.

Eric Cantor imagines the public is behind him on taxes. More likely, he’s saddling up to lead a fiscal reprisal of Lord Cardigan’s “Charge of the Light Brigade” into the “valley of
death.”

Fiscally speaking of course…

About the Author

I am a 62 year old married father and grandfather who lives in Wilmington, Delaware. As I approach the home stretch of life, I feel that myriad experiences I have had provides me with the perspective of one who has been there. This does not mean that I think I know it all. I eagerly look forward to learning something new each day, but more than six decades of life has taught me to share what I know, think and feel with others.