On Wednesday, Senator Grassley (R-IA) argued that having a debt ceiling at all may be unconstitutional, and on Thursday he voted to advance the “sense of the Senate” that millionaires should be taxed more in order to lower the deficit.
For the past week the U.S. Senate has been debating S. 1323, a bill introduced by Senate Majority Leader Harry Reid (D-NV) that declares: “It is the sense of the Senate that any agreement to reduce the budget deficit should require that those earning $1,000,000 or more per year make a more meaningful contribution to the deficit reduction effort.”
On Thursday the Senate voted to end debate and proceed to a not-yet taken vote on the bill. According to the roll call, Senator Grassley voted to end debate and advance the legislation, while Senator Tom Harkin (D-IA) didn’t bother to cast a vote. Twenty-two senators voted to filibuster the legislation, including Senator Ben Nelson (D-NE) as the sole Democrat and such Tea Party favorites as Senators Mike Lee (R-UT), Rand Paul (R-KY), Marco Rubio (R-FL), and Jim DeMint (R-SC).
Senator Grassley’s vote seems odd, given that he had recently argued that historic trends show that “for every dollar in tax increase, Washington seems to spend $1.17.” He explained to The Iowa Republican (TIR) that he voted to advance the resolution because:
This resolution, although misguided, is the only opportunity so far to have a debate on America’s fiscal situation, and I wanted to proceed to have that debate. In fact, that’s supposedly why Majority Leader Reid had the Senate in session this week. I don’t support this resolution, but bringing it up will finally give senators a vehicle by which to actually debate the budget and offer amendments. I don’t support the resolution because the problem isn’t that people are under-taxed, it’s that the government overspends. It also doesn’t make any sense to increase taxes and hurt job creation in this weak economy.”
It is unclear what amendments and additional speechifying on a non-binding resolution will accomplish, but if that’s what Senator Grassley wants, hopefully he will be actively involved in the dog and pony show.
During a conference call with reporters on Wednesday, Grassley made the strange argument that, under the 14th Amendment to the U.S. Constitution, “maybe the debt ceiling bill that Congress presumably has to pass for the government to borrow more, maybe, is contrary to that constitutional provision.”
Section 4 of the 14th Amendment provides, in relevant part, that: “The validity of the public debt of the United States, authorized by law…shall not be questioned.” Even assuming that this imposes a constitutional mandate that Congress pay off the federal debt, a refusal to raise the debt ceiling is not the same as defaulting on the debt.
Sadly, it appears that Senator Grassley has bought the liberal lie that America will begin to default on its loans come August 2nd, the Treasury’s new “drop-dead” deadline, if Congress doesn’t raise the debt ceiling. If this assertion is true, however, it would mean that the United States was so far in debt that it could not possibly pay off its existing debt without going further in debt.
In other words, the Left wants us to believe that the country’s monthly debt payments exceeds its entire monthly tax revenue. If that were in fact the case, we might as well do away with the debt ceiling entirely and continue to borrow and spend as if there is no tomorrow because, in reality, there won’t be.
Thankfully that isn’t the case—the country remains perfectly capable, for the time being, of servicing its debt without having to borrow more or increase taxes. As Veronique de Rugy and Jason Fichtner noted in an op-ed in The Washington Times:
The most recent Office of Management and Budget data shows federal revenues will reach $2.17 trillion this fiscal year. Interest payments on the nation’s debt are estimated to be $205 billion this year, or about 10 percent of revenues. Taking that payment off the top, [thereby protecting the country’s full faith and credit], leaves $1.9 trillion for Congress to spend.
But without learning to live within that $1.9 trillion now, we will soon have no full faith and credit to worry about. As the Times op-ed points out:
For example, let’s assume that interest rates don’t change and continue to stay low. In that case, in the year 2020, 70 cents of every federal dollar would be spent on interest to service the debt, Social Security, Medicare and Medicaid. But if interest rates rise by just 1 percent, 90 cents of every dollar would go toward the debt, Social Security, Medicare and Medicaid, leaving just 10 cents to split among education, defense and all other discretionary items.
According to recent Congressional Budget Office projections: “The national debt is growing at a rapidly accelerating pace. Total debt will ‘overtake the size of the entire U.S. economy this year.’ Last year, the CBO projected our debt would reach 80 percent of Gross Domestic Product in 2035. It has now revised this projection to a staggering one hundred and ninety percent of GDP.”
In reality, refusing to not raise the debt ceiling will cause the United States to, sooner or later, default on its debt. As previously noted, the answer isn’t more empty promises and fussy math by politicians in Washington, but rather having the debt ceiling serve as an immovable credit limit which will serve as a de facto balanced budget amendment that forces Congress to live within its means.
A vote against raising the debt ceiling is a vote to honor our debt; a vote for lifting the ceiling is a vote for eventual bankruptcy and national ruin.
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