Guest contributor, Kara Schulte, shares her take on the national dialogue on the debt ceiling.
On Monday, January 14th, President Obama spoke to the nation in an unexpected press conference in regards to the debt ceiling. As a milspouse, all you here is, “blah… blah… blah… we might not be able to pay our troops blah… blah… blah…” Whoa! No paycheck, what!? What on earth is going on in the government now that will prevent our military from getting paid? The debt ceiling crisis, that’s what. So what is the debt ceiling and why wouldn’t we get paid?
The debt ceiling was created in 1917 with a limit of $11.5 billion so Congress could issue bonds (debt) to prepare for the unexpected costs of World War I. The creation of the debt ceiling also had the intention of eliminating the need for the Treasury Department to get congressional approval every time they wanted to borrow money. Turns out, Congress has voted to increase the debt ceiling 78 times since March 1962, with 11 of those votes occurring in the last 12 years.
Simply put, the debt ceiling sets a fixed amount on how much the government can borrow to make payments on obligations it has incurred. The debt ceiling does not allow for new spending. It’s like our personal monthly budget. We know how much money we have and what bills we need to pay. The more debts we have as time goes on, the closer and closer we get to reaching our limit until we have no more money left in the bank account. When that happens to us, it’s time to buckle down on the finances so we have money to spend again.
As the country has incurred more and more debt, the Ceiling has become a public form of fiscal accountability forcing Congress and the President to take visible action when the government spends more than it collects. This has always resulted in Congress approving a raise. Often times Congress has waited until the last minute, but they always seem to come through. But why?
Well, the government has monthly bills to pay just like we do. Can you imagine the government calling its creditors having to explain why they can’t pay this month?
Why Care About the Debt Ceiling Now?
The current debt ceiling limit of $16.4 trillion is predicted to be reached by mid-February or early March. Traditionally, the party that has a majority power eagerly votes to raise the debt limit while the minority party wants to look into reducing spending. President Obama and the Democrats have openly stated that there will be no negotiating with Republicans; that the debt limit has to be increased. The Republicans are persistent in their quest to reduce federal spending before approving a debt limit increase. Let the battle begin!
Debt Ceiling Battle…Blow by Blow
In the Left Corner
President Obama, in his recent press conference, stated that he will refuse to negotiate with Republicans when it comes to raising the debt ceiling. He feels that spending cuts should be saved for a separate discussion and that new revenue collected should not come from spending cuts alone, but from increasing revenue. President Obama has publicly positioned the Republicans in a negative light in saying that by not supporting the increase in the debt ceiling, the Republicans are holding millions of Americans hostage and will cause an unprecedented economic crash.
Wait, won’t negotiate? Isn’t this a two party system where you need both parties acting together to get stuff done? In a government that is already completely divided, driving a stake further into that division could only do more harm than good.
In the Right Corner
Republicans are striking back at the non-negotiating Democrats. Speaker John Boehner’s request to have spending cuts that equal the amount of the debt ceiling increase is not completely out there. In fact, that is one of the main points made in the Budget Control Act of 2011 that President Obama signed into law in August 2011. Republicans are also pushing back on the Democrat’s belief that revenue come from more than just spending cuts. Republicans feel that the recent tax increases made during the Fiscal Cliff debate are more than enough.
There is some sign of hope rising from the Republicans though. Just this past week at a retreat, some Republicans said that they may be willing to agree to a 3 month debt limit increase. The three month increase allows for immediate action but also brings everyone back to the drawing board at the time when huge, across the board spending cuts are set to take place. The goal is to then discuss more rational spending cuts, pass a balanced budget (for the first time in four years, by the way) and then discuss another debt ceiling increase.
The consequence? Senators’ pay could be withheld until a balanced budget is passed.
Sounds great! Our pay is threatened; maybe threatening their salary (base pay of $174,000 per year) will finally drive them into action!
What I see happening though is another game of monkey in the middle. Both sides will not want to negotiate again and we are stuck in the middle hoping that we can get our paycheck so our families can eat for the month.
In the Far Right Corner
As if there was not enough fighting going on, Republicans are fighting a two front battle: the Democrats and themselves. Republicans are typically in the mindset that taxes should not be raised. Well, just earlier this month many Republicans broke that belief and voted for the Fiscal Cliff bill that increased taxes on many Americans. Being upset with their own party, there a number of Republicans who are refusing to go along with any type of deal Speaker Boehner and other Republicans present for a vote. Tea Party Republicans, Republicans supported by Americans for Prosperity, and other sticks in the mud say that there will not be a deal unless the Democrats agree to government spending cuts equal to a debt ceiling increase. Just when there was some light shining down on the situation, Republicans are holding their own party hostage.
Debt Ceiling: The Blame Game
So who is at fault for all of the drama on whether the country will pay its monthly bills? Everyone.
The Democrats blame the Republicans for being a stick in the mud and for having the country appear to be a “dead beat country.”
The Republicans blame the Democrats for spending money like a teenage girl going clothes shopping.
The Republicans even blame each other for either giving in too easy or for not budging an inch. The fact of the matter is that each side is right and that they have to come together.
The country has to honor its obligations, so the debt ceiling has to increase. The country also has to mind its wallet, so spending has to get under control. If each side could just set their public image aside and remember that they were voted by the people for the people then perhaps something could get accomplished.
Kara Schulte (guest contributor), is a proud milspouse and a current AFC candidate as an AFCPE intern. Kara holds a bachelor’s degree in psychology from Campbell University and a master’s degree in human services from Liberty University.
Red Boxing Gloves Hanging on Wall — Image by © Royalty-Free/Corbis
Where do you stand on the debt ceiling discussion? Keep it clean! <ding, ding>