Monday, July 25, 2011

Deadbeat Republican Values

Don’t they know that the children are watching and listening? Don’t they appreciate what they are teaching them? It is bad enough that for years the Republican Party leadership has been preaching and acting out the values of greed and selfishness. These Republican values have produced an entire “me first” generation; people who seek to maximize their own collection of toys and refuse to share with others. Now, the Republican leadership (Boehner, Cantor, Bachman, McConnell, Kyl) are teaching a new Republican value—don’t pay your bills.

With the exception of three fiscal years under the Clinton Administration, ours has been a debtor nation since at least 1981. Republicans and Democrats undoubtedly can argue over who is to blame for our huge national debt, but placing blame serves no legitimate purpose. The fact is that we have spent about $13 trillion more than we have received in revenues. Even this fiscal year, after an election in which Republican candidates pledged fiscal responsibility, the Congress voted to increase our national debt by extending the Bush Administration tax cuts (decreasing potential revenue) and providing funding to operate the Federal Government for the remainder of fiscal year 2011 (increasing spending). Both Republicans and Democrats voted to create this additional amount of debt.

When the Congress enacts appropriations it provides to federal agencies the authority to enter into obligations legally binding on the United States. The obligations agencies incur may be paid off quickly (e.g. compensation for employees) or over years (e.g. payments under defense contracts). In either event, so long as the Government operates with annual deficits, the Secretary of the Treasury pays off these obligations with two sources of money—revenues to the Government while they last, and borrowing after the revenues are exhausted.

The Congress has granted to the Secretary of the Treasury the authority to borrow funds on behalf of the United States in sections 3101 through 3113 of Title 31, United States Code, in a subchapter that is appropriately titled “Borrowing Authority.” In this subchapter, the various debt instruments—bonds, notes, certificates and others—that the Secretary may issue to borrow funds are authorized and described.

Dating from a time when running at a deficit was occasional, not the rule, the subchapter contains a limit on the amount of securities the Secretary can issue. This limit—designated “Public Debt Limit”—is contained in section 3101(b) which provides, “The face amount of obligations issued under this chapter and the face amount of obligations whose principal and interest are guaranteed by the United States Government . . . may not be more than $12,394,000,000,000 outstanding at one time.”

Reader, it is important to remember that this “public debt limit” is not a limit on the amount that the United States owes. Rather it is a limit on the amount of securities that the Secretary can issue to raise cash. It is also important to remember that raising this borrowing limit does not increase the amount of the Government’s debt. Further, failing to raise it does not freeze the amount of debt.

The Secretary of the Treasury has already reached his borrowing limit. He has told the world that as of August 2, 2011, he will not have sufficient cash to pay the Government’s obligations. Now, you would think that the Republican leadership—those guys and gals who claim to be fiscally responsible—would give the Secretary the authority he needs to pay our bills. But, for months, the Republican position has been “no.” They have made it clear that they will allow our bills to be paid only if the President bows to their demands. One of them, Representative Bachman, has made it clear that she will not vote to pay our bills even if the President concedes to all Republican demands.

Loyal reader, the Republicans will tell you that they are being responsible and are trying to cut our debt. But these Republicans are the same people who voted to increase our national debt in this very fiscal year. And, now, when the bills that they authorized so recently come due they say they aint gonna pay. So remember, when the Secretary of the Treasury does not have enough cash to pay our fighting forces, or our hard-working federal employees, or the contractors that in good faith provided us goods and services, it’s because of Republican values.

No comments: