Rebublicans Should Be Embarrassed By Debt Increase Vote

Floyd and Mary Beth Brown, FloydReports.com

Washington is obsessed by picking winners and losers. But the Establishment media has the story all wrong again. The Republicans, they say, won this skirmish over debt. But actually Republicans displayed a total lack of commitment to their principles.

The only winner in the “Budget Control Act of 2011″ is massive government and the Washington bureaucracy it feeds with your money.

We are embarrassed for Republican members of Congress who go out with a straight face and talk about how they controlled spending, when they voted to increase the debt limit by between $2.1 and $2.4 trillion, the biggest explosion of debt in American history.

In reality, the bill as Rep. Tom McClintock, R-CA, points out, “allows the government to avoid spending reductions for the next two years while squandering our last best hope of averting a sovereign debt crisis.” This bill literally guarantees the economy will get worse, and the budget deficit will explode higher.

As a Republican state senator in California, McClintock predicted and fought against the policies that have bankrupted Sacramento and has now taken his crusade to Washington, D.C. He exhorted his colleagues to see reality, giving excellent reasons he voted against the Boehner/Obama bill: “The purported cuts, even if realized, are far below the $4 trillion deficit reduction that credit rating agencies have warned is necessary to preserve the Triple-A credit rating of the United States government; it blows the lid off the House budget passed in April by more than a half-trillion dollars over ten years; it makes no significant spending reductions for at least the next two years, essentially freezing spending at an unsustainable level.”

McClintock further explained, saying, “While the debt increase occurs this year, significant spending cuts aren’t to be made for many years and can be ignored or reversed by future acts of Congress; the spending caps are easily circumvented by declaring appropriations to be an emergency, a response to a ‘major disaster,’ or necessary for the ‘global War on Terror’; and the balanced budget amendment provisions are illusory because the amendment is completely undefined.”

But even more damaging to Republicans is the way they handed their citizen mandated legislative power to Barack Obama, damaging the U.S. Constitution in the process. Constitutional scholars….

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The Budget Control Act Of 2011 Violates Constitutional Order

Herbert W. Titus and William J. Olson, FloydReports.com

 

In a Constitutional Republic of the sort that we thought we had, the process by which laws are made is at least as important as the laws that are enacted. Our Constitution prescribes that law-making process in some detail, but those who voted for the “Budget Control Act of 2011″ (“BCA 2011″) were wholly unconcerned about trampling upon required constitutional processes on the way to the nirvana of “bi-partisan consensus “to avert a supposed crisis. At least two titles of the bill now being rushed through Congress are unconstitutional.

First, the “Debt Ceiling Disapproval Process” in BCA 2011 Title III unconstitutionally upends the legislative process.

The Constitution’s Article I, Section 8, Clause 2 vests in Congress the power “to borrow Money on the credit of the United States.” As two of America’s leading constitutionalists, St. George Tucker and Joseph Story, observed, the power to borrow money is “inseparably connected” with that of “raising a revenue.” Thus, from the founding of the American republic through 1917, Congress — vested with the power “to lay and collect taxes, duties and imposts,” — kept a tight rein on borrowing, and authorized each individual debt issuance separately.

To provide more flexibility to finance the United States involvement in World War I, Congress established an aggregate limit, or ceiling, on the total amount of bonds that could be issued. This gave birth to the congressional practice of setting a limit on all federal debt. While Congress no longer approved each individual debt issuance, it determined the upper limit above which borrowing was not permitted. Thus, on February 12, 2010, Congress set a debt ceiling of $14.294 trillion, which President Obama signed into law.

However, a different approach was used when BCA 2011 was signed into law on August 2, 2011. Title III of the Act reads the “Debt Ceiling Disapproval Process.” Under this title Congress has transferred to the President the power to “determine” that the debt ceiling is too low, and that further borrowing is required to meet existing commitments,” subject only to congressional “disapproval.” For the first time in American history the power to borrow money on the credit of the United States has been disconnected from the power to raise revenue. What St. George Tucker and Joseph Story stated were inseparable powers have now by statute been separated.

Under the new process established by this bill, if the President determines, no later than December 31, 2011, that the nation’s debt is within $100 billion of the existing debt limit and that further borrowing is required to meet existing commitments, the debt limit automatically increases. The President need only to certify to Congress that he has made the required determination. Once the President acts, the Secretary of the Treasury may borrow $900 billion “subject to the enactment of a joint resolution of disapproval enacted” by Congress.

But this is not all. Title III also provides that if Congress fails to disapprove the debt ceiling increase in the amount of $900 billion, the President may again certify to Congress that he has determined that the debt subject to the new ceiling is within $100 billion and that further borrowing is required to meet existing commitments. So the Secretary of Treasury is authorized to borrow another $1.2 trillion. Indeed, the Secretary may borrow even more — up to $1.5 trillion if a proposed balanced budget amendment has been submitted to the states for ratification. As was true of the first round of ceiling raising and borrowing, the President and Secretary of the Treasury are constrained only by the possibility of a congressional resolution of disapproval which, itself, is subject to veto by the President.

By giving the President the authority to increase the debt ceiling and to determine that borrowing is necessary to meet the nation’s commitments, this bill….

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Five Reasons the Debt Deal is a Budget-Busting Mistake

Rep. Tom McClintock, FloydReports.com

The “Budget Control Act of 2011” increases the debt limit by between $2.1 and $2.4 trillion, the biggest explosion of debt in American history. It allows the government to avoid spending reductions for the next two years while squandering our last best hope of averting a sovereign debt crisis.

I am opposed to this measure for the following reasons:

  1. The purported cuts, even if realized, are far below the $4 trillion deficit reduction that credit rating agencies have warned is necessary to preserve the Triple-A credit rating of the United States government;
  2. It blows the lid off the House budget passed in April by more than a half-trillion dollars over ten years;
  3. It makes no significant spending reductions for at least the next two years, essentially freezing spending at an unsustainable level. While the debt increase occurs this year, significant spending cuts aren’t to be made for many years and can be ignored or reversed by future acts of Congress;
  4. The spending caps are easily circumvented by declaring appropriations to be an emergency, a response to a “major disaster,” or necessary for the “Global War on Terror”; and
  5. The balanced budget amendment provisions are illusory because the amendment is completely undefined.

THE ACT FLIRTS WITH A CREDIT DOWNGRADE

Let’s not forget the gorilla in the room. America faces an unprecedented fiscal crisis because of an unprecedented spending binge by this administration and the last. Credit rating agencies have openly warned that the nation’s Triple-A credit rating cannot be sustained without a credible plan to reduce the projected 10-year budget deficit by roughly $4 trillion.

This bill averts the threat of downgrade for failure to pay our current bills, but it also gives the most spendthrift administration in American history a credit line to continue spending at unsustainable levels through the next election. And it falls far short of the measures demanded by the rating agencies as necessary to maintain the Triple-A credit of the United States government.

If the nation’s Triple-A credit rating is downgraded as a result of this failure, it will mean higher interest rates to maintain government debt. Given the enormity of that debt, even a small increase in interest rates can add crushing additional costs to government. Furthermore, interest rate increases would ripple through the economy, causing higher mortgage interest rates, higher credit card rates and a severe additional drag on the economy.

This would occur on top of the inherent economic damage this bill does. The borrowing authorized in this measure is not theoretical: it amounts to more than $7,000 for every man, woman, and child in the nation or roughly $28,000 for a family of four. This debt must be repaid through that family’s future taxes just as surely as if it appeared on their credit card statement. In a real sense, this act means that every family in America has acquired the obligation to make the same payments as if they had just bought a new car.

Predicting the future decisions of the credit rating agencies is a fool’s errand. Much of their economic analysis is marred by perception, psychology, political pressure, and self-interest. But there is no blinking at the fact that on many occasions in the last month their senior analysts have called for immediate adoption of a credible work-out plan for $4 trillion of genuine deficit reduction in order to maintain a Triple-A rating. We ignore these repeated and explicit warnings at our peril.

SAVINGS ARE GREATLY EXAGGERATED

The Budget Control Act purports to cut federal discretionary spending by $900 billion over the next ten years and set in motion another $1.2 trillion to $1.5 trillion in ten-year spending reductions by year’s end. A recurring theme by proponents is that it guarantees a dollar of cuts for every dollar of new debt.

However, while the debt limit increase occurs this year, the savings occur over the next decade and are heavily back-loaded toward the end of that period. The work of the great economist, J. Wellington Wimpy, can be observed here: “I will gladly give you a dollar of spending cuts ten years from now for a dollar of debt today.”

In reality, this bill will decrease total federal spending by just $4 billion between….

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