Geithner figures that Obama will have maxed out the credit cards again by May 16, 2011. In order to keep the lights on, Obama wants Congress to increase his limit.
As Congress considers the debt ceiling increase, they should pay special attention to the words of both President Obama and Vice-President Biden from March 16, 2006 as recorded in the Congressional Record:
Mr. President, I rise today to talk about America’s debt problem.
The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.
Over the past 5 years, our federal debt has increased by $3.5 trillion to $8.6 trillion. That is ‘‘trillion’’ with a ‘‘T.’’ That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next 5 years, between now and 2011, the President’s budget will increase the debt by almost another $3.5 trillion.
Numbers that large are sometimes hard to understand. Some people may wonder why they matter. Here is why: This year, the Federal Government will spend $220 billion on interest. That is more money to pay interest on our national debt than we’ll spend on Medicaid and the State Children’s Health Insurance Program. That is more money to pay interest on our debt this year than we will spend on education, homeland security, transportation, and veterans benefits combined. It is more money in one year than we are likely to spend to rebuild the devastated gulf coast in a way that honors the best of America.
And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on.
Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities. Instead, interest payments are a significant tax on all Americans—a debt tax that Washington doesn’t want to talk about. If Washington were serious about honest tax relief in this country, we would see an effort to reduce our national debt by returning to responsible fiscal policies.
But we are not doing that. Despite repeated efforts by Senators CONRAD and FEINGOLD, the Senate continues to reject a return to the commonsense Pay-go rules that used to apply. Previously, Pay-go rules applied both to increases in mandatory pending and to tax cuts. The Senate had to abide by the commonsense budgeting principle of balancing expenses and revenues.
Unfortunately, the principle was abandoned, and now the demands of budget discipline apply only to spending. As a result, tax breaks have not been paid for by reductions in Federal spending, and thus the only way to pay for them has been to increase our deficit to historically high levels and borrow more and more money. Now we have to pay for those tax breaks plus the cost of borrowing for them. Instead of reducing the deficit, as some people claimed, the fiscal policies of this administration and its allies in Congress will add more than $600 million in debt for each of the next 5 years. That is why I will once again cosponsor the Pay-go amendment and continue to hope that my colleagues will return to a smart rule that has worked in the past and can work again. Our debt also matters internationally. My friend, the ranking member of the Senate Budget Committee, likes to remind us that it took 42 Presidents 224 years to run up only $1 trillion of foreign-held debt. This administration did more than that in just 5 years. Now, there is nothing wrong with borrowing from foreign countries. But we must remember that the more we depend on foreign nations to lend us money, the more our economic security is tied to the whims of foreign leaders whose interests might not be aligned with ours.
Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘‘the buck stops here.’’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.
I therefore intend to oppose the effort to increase America’s debt limit.
Mr. President, I was necessarily absent this morning when we considered Senator BAUCUS’s amendment to the debt limit increase. If I had been here, I would have supported the Baucus amendment.
The Baucus amendment is clearly needed. The massive scale of other nations’ accumulation of our debt has added another level of danger and complexity to our international economic relations.
This is a two-way street. The tsunami of debt created by the policies of this administration has to go somewhere. China is one of the major purchasers of that debt. Japan, Great Britain, and others have major holdings, too. In the short term, that has soaked up a lot of our bonds, and helped to keep interest rates down. That is a good thing.
However, that has kept the Chinese currency artificially low, and ours artificially high. So they can sell their products at a discount, and our exports are more expensive. That is a bad thing.
Our trade deficit was a record $726 billion last year; $202 billion of that was our trade deficit with China alone. But as the rest of the world copes with the waves of U.S. debt, we are now all in the same leaky boat. There is just so much of our debt other nations want to hold. The more of it they accumulate, the closer we are to the day when they will not want any more.
When that happens, slowly or rapidly, our interest rates will go up, the value of their U.S. bonds will drop, and we will all have big problems. We need both more awareness, and more understanding, of this fundamental threat to our economic well being and the global
But the roots of that threat lie in the disastrous policies of this administration. Because this massive accumulation of debt was predicted, because it was foreseeable, because it was unnecessary, because it was the result of willful and reckless disregard for the warnings that were given and for the fundamentals of economic management, I
am voting against the debt limit increase.
In the 5 years he has been in office, President Bush has added more to our
foreign debt that the 42 Presidents before him. It took 224 years to accumulate $1 trillion of debt to other nations. It took President Bush just 5 years to more than double it.
Over $3 trillion in debt, foreign debt and debt held by Americans, has been
piled up by this administration. When he set out on the course that brought us to this sorry state, the President was clearly and repeatedly warned that massive tax cuts would
leave us vulnerable to natural disasters, economic slowdown, or threats to our national security. ‘‘Don’t worry,’’the President told us. ‘‘I know what I am doing.’’
After 9/11, in the face of what he has himself called the moral equivalent of the World War II, or the Cold War, he insisted that while everything else had changed, he would not change his economic policies.
Facts had changed. His promise to balance the budget, his promise to pay down the debt, were proved to be false. But he refused to take responsibility for his policies. He refused to admit that a changed world demanded a change of course. His refusal has pushed us deeper and deeper into the hole.
His refusal added $450 billion to the debt in 2002; it added $984 billion in 2003; it added $800 billion in 2004. And here we are again today, adding another $781 billion. With that addition, our national debt will be $8.6 trillion at the end of this year.
The President’s budget plans will bring that number to $11.8 trillion at the end of the next 5 years.
This is a record of utter disregard for our Nation’s financial future. It is a record of indifference to the price our children and grandchildren will pay to redeem our debt when it comes due.
History will not judge this record kindly.
My vote against the debt limit increase cannot change the fact that we have incurred this debt already, and will no doubt incur more. It is a statement that I refuse to be associated with the policies that brought us to this point.
The following Senators joined them in voting against increasing the debt limit in 2006:
Congress should refuse to extend any more credit to this administration for many of the same reasons Obama and Biden both listed in their own protests at extending credit to President Bush.
Every complaint they made against Bush is only worse now.
If you take them line by line, all of their complaints are worse today than they were under Bush in clearly quantifiable measures...hard dollars.
Enough is enough!