Debt Ceiling Winners & Losers

My most recent blind date

According to The Washington Post's Chris Cillizza, the winners are Mitch McConnell ("a voice of reason and frankness for Republicans"); the tea party ("will almost certainly be emboldened"); President Obama ("needed a deal of some sort to prove that he was capable of making the government work"), CBO wonks ("a central player"); and Grover Norquist ("no revenue increases in the final deal").

The losers are Congress ("about as popular as poison ivy"); Gang of Six ("never able to deliver"); Commissions ("a lot of bad commission history"); and liberals ("not much for the ideological left to celebrate").

I'd argue that everyone is a loser. McConnell is perhaps the most partisan member of Congress, having told the National Journal that "the single most important thing" is insuring that Obama is a one-termer. Tea party purists have managed to alienate themselves from the center. Obama is guilty of both dithering and then alienating the very people he needed.

Worst of all, we're the real losers here. Moody's is convinced that the nation's AAA rating is in peril. If it costs the government more money to borrow, then all of our expenses will skyrocket, too.

That's what partisans on both sides seem to forget. We're all Americans, left or right. Most of us are people of good will. The basic difference between left and right is that the left thinks government is the answer while the right thinks government is the problem. Both sides are right and wrong. We need to listen to each other more, and this latest squabble is a sign that centrists like Charlie Dent are in short supply in Washington.

Dent: Defaulting Not an Option

Yesterday afternoon, LV Congressman Charlie Dent spoke on the House floor in support of the Budget Control Act, which will raise the debt limit and prevent the country from spiraling into default. (You can see the video here). I have transcribed the speech, adding links to news articles that substantiate what Dent said.

First and foremost, we, the United States House of Representatives, have an obligation to govern. We have a tremendous responsibility to the American people to consider this plan that insures our nation does not default on our nation's commitments, while at the same time places this country on a sustainable fiscal path.


Let me be clear. Defaulting on America's obligations to our creditors, to our seniors, disabled veterans, active military personnel, college students and many others, is not an option.


This Bill prevents a default, and it pays our bills.


Congress must act quickly to deter a ratings downgrade, a downgrade that will affect families and small businesses all across the country. Only a sound, credible plan that places us on that sustainable trajectory will prevent that threatened downgrade, driven in part by an unprecedented spending binge by this administration, which has blown up the fiscal balance sheet.


A previous speaker said a few moments ago that we're playing games. I can assure you, this is no game. This is serious stuff. And speaking of serious, the White House has still refused to offer a serious, specific plan, in writing, that we can review. In fact, in a stinging rebuke of the administration, the nonpartisan Director of the CBO - Doug Elmendorf - said, "We don't estimate speeches."


The Senate's dug in its heels, too. It would be nice if they passed a Bill. Any Bill. It's been 800 days since there's been a budget. It's time for them to act, and to move to prevent this type of fiscal calamity that many have predicted.

I ask my colleagues to support this legislation. It's a step forward. It may not be the final product, but it moves this process forward. I encourage the Senate to take it up. But most importantly, we have a sacred duty and a solemn obligation to lead and act. We do have that affirmative obligation to govern for the benefit of our country and the American people.


The world is watching. Americans are watching. It's time for us to lead and demonstrate American exceptionalism.

Why are Republicans insisting on cuts in spending? As the graph above demonstrates, spending under Obama has been out of control.

Another Protest Rally at Dent's Office on Friday

In apparent reaction to LV Congressman Charlie Dent's unusually candid newsletter about the debt ceiling, 18 members of MoveOn cascaded into his Allentown office on Tuesday, demanding that he protect the middle class. They call themselves, "We, the People." Dent, of course, was in Washington. He's under the goofy impression he represents everyone, including people of limited means.

Now Dent's still in Washington, working on a debt ceiling solution. But now it's the LV Democratic Coalition's turn to invade. An "urgent action item" from Norco Vice Chair Lorraine Pasquali is calling all Democrats to visit Dent's Allentown office on Friday at 3:30 PM. You're supposed to bring signs that say "Don't be reckless with the economy" and "It's time to compromise."

If Dems want signs like that, they should ask the Republicans. Just before the vote on Obamacare, they had lots of signs that said pretty much the same thing.

Who knows, maybe the Fleckster will arrange for a fringe festival there or bring mimes.

Debt Ceiling: Obama Should Practice What He Preaches

When the President and Speaker of the House take the American people away from their boob tubes, it's usually to announce some amazing success, like a new iPad or something. But last night, Barack Obama and John Boehner used the airwaves to announce yet another failure on a debt ceiling increase.

In a 16-minute speech from the White House's East Room, Obama placed the blame for this failure on "a significant number of Republicans" who demand a "cuts only approach." He condemned the "partisan three-ring circus in Washington."

In a shorter speech from the Speaker's ceremonial office, Boehner complained that Obama wants a "blank check" and "would not take Yes for an answer."

Obama and Boehner, behind closed doors, appeared to have had a "Grand Bargain" with $4 trillion in spending cuts and "revenue increases," i.e tax hikes, over 10 years. That fell apart because, after agreeing to $800 billion in increased revenue, Obama wanted another $400 billion. Then, after going back on a deal that would already be a hard sell to sixty or so Tea Parfty House Republicans, Obama goes on national television and announces, "I’m the only mature person in Washington.”

Talk about snatching defeat from the jaws of victory.

Now, Congressional Democrats and Republicans have competing plans that call for no revenue increases at all. As Ezra Klein comments, Republicans have already won.

The far left, of course, is demanding that Boehner be tried for treason. And birther Donald Trump wants Congress to reject any new debt ceiling, just to insure Obama's defeat at the polls.

Despite the usual incendiary rants, it seems likely that House Republicans will cut a deal with Senate Majority Leader Harry Reid, who has vulnerable Senators to protect and knows how to count.

Obama preached about the importance of compromise. Perhaps he should practice what he preaches.

Dent Speaks Out on Debt Ceiling

LV Congressman Charlie Dent's latest newsletter, which focuses on the debt ceiling, pulls no punches. President Obama will address the nation at 9 PM.

As I write this column on Monday morning, Greece is being bailed out once again by its European neighbors. Italy is on the brink. Global markets are volatile and jittery. And our nation faces a fiscal challenge of enormous proportions. That's the bad news. The good news is that America is blessed and exceptional, and I still believe we have the fortitude and political capacity to meet this unprecedented challenge.

First and foremost, we must deal with the plain truth: Defaulting on America's obligations -- to our creditors, seniors, disabled veterans, active military personnel, college students and many others -- is not an option. Second, a ratings downgrade of the US government must be prevented.


Stopping a default will occur by simply raising the debt ceiling; preventing a ratings downgrade is a much more demanding, painful exercise that will impact us all. Only a sound, credible plan that places America on a sustainable fiscal trajectory will prevent the downgrade Standard & Poors warned of a few months ago and has recently foreshadowed. And just what does a downgrade mean? Higher interest rates for everyone. Interest rates for mortgages, small business financing, car loans, credit cards and yes, the federal government’s debt service payments will increase dramatically, which in turn will dig us into an even deeper hole.


I have spent an enormous amount of time working and meeting with financial experts, ratings agencies, Republicans of all ideological stripes, Gang of Six Senators, and Blue Dog Democrats to find an acceptable resolution.


Based on these discussions, it is clear that a resolution with broad bipartisan support and deep commitment is essential to restoring market confidence, and those same markets will respond much better to a Congressional act of commission rather than an act of omission. Prioritizing our debt obligations, attractive as it may sound, will be extremely disruptive and add more uncertainty to an already fragile situation. If you don't believe me, please read the Bipartisan Policy Center's sobering debt limit/cash flow analysis for the federal government beginning August 3.


So what should be done?


First, the White House needs to offer a serious, specific plan. No more back-of-the-envelope suggestions, leaked from closed door meetings. As the nonpartisan CBO Director Doug Elmendorf stated in a stinging rebuke of the President, "we don't estimate speeches." Carping about the House passed budget and the "Cut, Cap and Balance" legislation because it cuts spending is not a substitute for leadership.


To the Senate, do something. Anything. How about passing a bill? Under Senate Majority Leader Harry Reid, it has been a staggering 800 days since a budget was passed in the chamber. Congress can't clap with one hand. In spite of Senator Reid, the Gang of Six has made an important contribution to the fiscal reform discussion.


To some of my more frustrated Republican colleagues in the House, for the good of the American people, I ask that you remain open to potential solutions beyond Cut, Cap and Balance. And please, focus less on what you will never do and more on what we must do. We have a sacred duty and solemn obligation to lead and act. We have an affirmative obligation to govern for the sake of our country.


The hourglass is nearly empty.


Let’s review the options: 1) Cut, Cap and Balance; 2) a short-term plan based on agreed to spending cuts in recent negotiations; 3) the so-called "Grand Bargain"; or 4) the last ditch plan offered by Senator McConnell.


Or how about an intermediate approach like this: Immediate spending cuts that exceed the amount needed to raise the debt ceiling through January, a binding commitment to: 1) enact comprehensive tax reform that eliminates tax breaks and loopholes in exchange for lower marginal rates that will spur economic growth and create jobs; 2) long term spending reforms, including caps; and 3) budget enforcement mechanisms.


If nothing else, we must bring the process into the open to restore confidence. The American people demand leadership and constructive action. The world is watching. It's time to lead and demonstrate our American exceptionalism.


-Congressman Charlie Dent

Debt Ceiling Crisis: A Pox on Both Their Houses

Jonathan Miller's Debt Ceiling for Dummies explains why it's imperative to resolve the debt ceiling crisis on or before August 2, the date we go into default. Failure means a shutdown in many government services, including Social Security and Medicare checks. It will degrade our credit rating internationally. It will even mean higher interest rates on individual credit cards and mortgages. Given these dire consequences, it's a stupid time for either Republicans or Democrats to engage in a game of brinkmanship. But we're Americans, and have proved time and again that we're pretty dumb.

Right now, there are two competing proposals, although details might change by the time you read this. House Speaker Boehner, on behalf of Republicans, would raise the debt limit about $1 trillion, and then would spend seven months on Tax Code reforms, as well as cuts to Medicare and Medicaid. After that, he would raise the debt limit again. Senate Majority Leader Harry Reid, on behalf of Democrats, would raise the debt ceiling by $2.5 trillion now, accompanied by cuts in that amount over the next ten years.

Both plans avoid a tax hike. Neither plan will succeed. President Obama has already vowed to veto Boehner's plan, while Democrats lack the muscle to push theirs through Congress.

Who's to blame? A pox on both their houses, I say.

This gridlock is precisely why we need more centrists like the Gang of Six, or Charlie Dent or Bob Casey. They are loyal to their parties, but eschew the extremes. Last night, Dent expressed concern about an "adverse reaction" in financial markets, and stated lawmakers must come to an agreement.

We need more bipartisanship and less flame-throwing.

Dent: Raise Debt Ceiling, But Reduce That Deficit

According to Treasury Secretary Timothy Geithner, refusing to raise the $14.3 trillion debt ceiling will push us into a "double dip recession." That's pretty amazing, especially since Geithner has already said the recession is over.

In a statement released today, LV Congressman Charlie Dent states he supports raising the debt ceiling, but only if that measure is accompanied by reforms reducing the deficit.

“Today, the United States reached the federal debt ceiling of $14.3 trillion – an outcome fueled by Washington’s history of excessive and unsustainable spending. The fragile condition of our economy, coupled with our nation’s severe budget problems, may compel Congress to raise the debt ceiling, but this significant step must be taken only if a concrete strategy to reduce the federal deficit is simultaneously set in motion.

“Proposals to raise the debt ceiling without enacting substantial reforms that control long-term government spending are unacceptable. Equally, allowing the government to potentially default on its debt is reckless and would have a dramatic impact on the American economy. I believe Congress must use this situation as an opportunity to build on recent achievements that promote sustainable spending and economic stability.”