GOP Will Punt on Debt Ceiling

RUSH: I have a Reuters story here on the debt ceiling. You are not going to like it. Before I tell you what it is, let’s listen to Alice Rivlin. She’s a former budget director for Clinton, I believe. She had something to do with Clinton back in the nineties. She’s a reputed budget expert. She was on PMSNBC last night. Lawrence O’Donnell said, “I’ve been asking people with expertise like yours, what would happen if we failed to raise the debt ceiling on that day that it approaches, where at the stroke of midnight we crack through it at the Treasury, and we have not raised the debt ceiling? What happens?”

RIVLIN: Contractors won’t get paid! Social Security recipients, uh, would not get their checks! The doctors that do Medicare wouldn’t get — get reimbursed! The world would know that we’re a deadbeat country — uh, we take on obligations and we don’t pay them — and why would you want to lend to a deadbeat country? You wouldn’t! It would throw us into a deep recession! Interest rates would be sky-high, and we’d be in terrible shape fairly quickly.

RUSH: All right, now, here’s an approved, accredited member of the Ruling Class — Alice Rivlin, OMB expert, budgetary expert — and what she says is simply not true. We have two to three months of revenue to service debt without raising the debt ceiling. We’ve got revenues coming in from tax receipts to pay on the debt. We have any number of alternatives to pay the debt service without raising the debt ceiling. It is not necessary. Furthermore, folks, it is not even arguable: Social Security recipients would get their checks if the debt ceiling is not raised. Contractors would get paid.

Miss Rivlin here is simply an agent of the Panic America Crowd trying to convince them that the world financial system and the American economy will collapse in a couple-three weeks if the debt ceiling is not raised, and that is not true. The doctors that do Medicare would not get reimbursed? That’s not true. Although, dirty little secret: A lot of them aren’t being reimbursed now in a timely fashion. We have any number of reservoirs of money and incoming tax revenue to service our debt for 60 to 90 days, if not longer. In fact, Michele Bachmann and others have said we could go six to seven months without raising the debt ceiling.

Okay, so there’s that. This story just cleared the Reuters wire. You are not going to like it. “As Washington gears…” You’re not gonna be surprised but you’re not gonna like it. “As Washington gears up for a fight over the debt ceiling, lawmakers” meaning Congress “are considering an approach that would allow them to say they are adopting fiscal discipline over the long term even as they vote” to raise the debt ceiling. The approach, outlined in several proposals circulating on Capitol Hill, would set specific savings targets and require automatic spending cuts and possibly tax increases if the long-term goals are not met.

“Contentious fights over taxing wealthy Americans and overhauling health programs for the poor and elderly would be left to a later date.” In other words, they are concocting a way to kick the can down the road even further. “This path would give lawmakers political cover as they vote to allow the government to borrow above its current [ceiling of a] $14.3 trillion limit, a move strongly opposed by the Tea Party movement and other fiscal conservatives who want to see government spending slashed. Lawmakers and Washington pundits say it could head off a looming showdown over raising the debt limit that could stretch out for weeks after the limit is reached in mid-May.

“‘It … enables you to build some trust between the two sides and get past the debt limit and get that monkey off the market’s back,’ said Joe Minarik, a budget expert at the Committee for Economic Development think tank who helped craft a plan pitched to lawmakers privately this week.” Let me translate this for you: A guy at a think tank probably was asked to come up with a way that members of both parties could deal with this and make it look like they’re dealing with it while not dealing with it. So the plan they came up with was to raise the debt ceiling while promising severe cuts and spending restraints “down the road.”

The length of the “road” is not specified here, but I guarantee you we’re talking years — months, years — and then if months and years after the deal is reached the spending limits are not met, then taxes go up and spending cuts supposedly take place. So what they’re basically going to tell us, if this flies is (let me pretend to be a member of Congress on the program), “Yeah, Rush, what we’re gonna do is we’re taking this very seriously, the debt ceiling. You know the government can’t operate, Rush, if we reach the debt ceiling. We can’t really face that. We have to be able to borrow to service our debt and to continue meeting our obligations.

“Everybody knows this, Rush. I mean, you know it. It’s intellectually understandable. Everybody knows it! We have to keep borrowing, but we’ve gotta get a handle on this, Rush. We just can’t keep spending this way. We’ve got this crisis; we gotta get past this. Everybody knows this, Rush! We don’t want Social Security recipients not receiving their checks, and we want to make sure we service the debt. We don’t want to damage our credit rating, Rush. I’m sure you understand this. So we’re gonna raise the debt limit to whatever it is and in it we are making promises to ourselves: In six months or a year down the road, we’re gonna have serious cuts to deal with this — and if we don’t do those cuts in six months to a year, then there are riders attached to this that will automatically enforce the reductions in spending and maybe some tax increases.”

To which I would then say: “Well, then, a month before that happens you just rewrite the bill so that all that you agreed to nine months ago doesn’t happen.”