By Richard Eckstrom, S.C. Comptroller
In 2006, Barack Obama, then a member of the U.S. Senate, voted against raising the “debt ceiling” — the maximum amount of outstanding federal debt the US government can incur by law.
“Increasing America’s debt weakens us domestically and internationally,” he said at the time.
These words have come back to haunt him.
Five years later, as President, Mr. Obama is asking Congress to raise the debt ceiling. Otherwise, the President said, the United States will default on its borrowings and send the world economy tumbling.
It’s no secret that the United States faces its most serious financial challenges in quite a while. Our government’s unsustainable deficit spending and related federal debt were only made worse by the $800 billion “stimulus” bill two years ago – a colossal spending package that was sold as a cure for the nation’s economic crisis, but which failed to create the promised jobs while it further buried our children and grandchildren under mountains of IOUs.
The lingering financial crisis recently prompted a leading credit rating agency to issue a serious warning about the federal government’s credit rating. In what should be a clear message to Washington, Standard and Poor’s credit rating service revised its long-term credit outlook for U.S. Treasury securities from “stable” to “negative.” Unless Congress and the White House reach agreement on a way to reduce federal red ink, Standard and Poor’s said, the government could find itself too deep in debt within two years to justify its current AAA credit rating.
The issue of the day in Washington is the debt ceiling. America’s current debt is $14.27 billion – and rising. The debt ceiling currently sits at $14.29 billion.
Now Mr. Obama and his allies in Congress want to raise the debt ceiling, which is supposed to limit deficit spending. They say failure to raise the limit would be “catastrophic” because it would undermine the U.S. recovery. Don’t buy that. They said the same thing two years ago to force Congress to quickly pass their wasteful stimulus bill.
On the other hand, others in Congress say an increase in the debt ceiling should be done only if accompanied by real cost-cutting reforms — to ensure that America never again finds itself in this situation.
As the President has lobbied to increase the debt limit, he’s been reminded of his own words from 2006. In response, the White House described his 2006 vote against raising the debt ceiling as merely a symbolic stand against a president from the other party. And that’s exactly what it now appears to have been — playing politics.
Ironically, the same White House recently admonished Congress not to “play politics” with the debt ceiling.
This is why it matters when people in positions of public trust “play politics” with serious issues: To a large extent, the country’s economic health rests on the confidence of consumers and investors… confidence in the nation’s economic future, and confidence in our government’s economic and fiscal policies. Yet, today we have a President who’s in the weak position of arguing in favor of increasing the debt limit just a few years after arguing passionately from the Senate floor that increasing the debt limit would bring serious harm to the nation. Flip-flops like that hardly inspires confidence.
Two things are clear in this debate. First, any increase in the debt ceiling absolutely must be temporary and must come with real reductions in federal spending. And secondly, if Americans lack faith in the President’s policies — or even can’t determine where he truly stands on this serious issue — he has his own words and actions to blame.
