A debt ceiling vote could save America if House Republicans are willing to take on the Democrats

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to All repairs in the house rules Gained by the conservative rabbi last week, most important was the promise that Republicans would not pass any increase in the debt ceiling until substantial reforms to the budget process and spending cuts were secured.

The need for such a rule may seem self-evident. the Debt has increased by about $4 trillion In just two years. Government borrowing last year was in the 13 digits, or $1.4 trillion. Absent budget reforms, we could easily see a decade coming with another $10 trillion added to debt. And don’t forget that every one percentage point increase in interest rates by the Federal Reserve raises debt by more than $1 trillion over the next decade.

So budget hawks and those concerned about the national debt should applaud that commitment.

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barely. Instead, President Joe Biden, Senate Majority Leader Chuck Schumer, Collectively, the entire Washington special interest community sounds like the raw cry that we will be facing economic Armageddon if there is even a hint of the debt limit expiring this summer. The New York Times ravely raved earlier that “a breach of the debt limit would cause the United States to default on its payments for the first time ever, creating financial chaos in the global economy. It would also force American officials to choose between continued aid such as Social Security checks and interest payments.” on the country’s debt.

House Speaker Kevin McCarthy will have to confront Democrats' demands on spending if he hopes to rein in debt and deficits.

House Speaker Kevin McCarthy will have to confront Democrats’ demands on spending if he hopes to rein in debt and deficits.
(Kent Nishimura/Los Angeles Times via Getty Images)

This is inverted logic. The good credit standing of the nation in the global capital markets is not compromised by not exceeding the debt ceiling. The much greater risk is that Congress extends the debt ceiling, but without any major reforms in the way Congress spends.

We’ve just experienced the painful fallout from runaway government spending and debt over the past year: hyperinflation that has jumped to a 40-year high – has cost the average American family nearly $4,000 in lost real-world wages.

The government’s addiction to red ink is not due to inadequate tax collection. The Congressional Budget Office just reported this week that in 2022, the United States government will net a record $4.9 trillion from Americans. As a percentage of our GDP it was very close to an all-time record high.

However, Biden and congressional Democrats say they want a “clean” debt ceiling bill — no strings attached.

To that, Republicans should say, “No deal.” The experience of the past 40 years shows conclusively that the only time fiscal conservatives have secured significant spending reform concessions from Democrats is a condition of raising the debt ceiling. These are the “coming to Jesus” moments of financial discipline.

In 1985, Gram-Rudman deficit ceilings were enacted as part of the debt bill. That puts congressional spending on a diet. In 1996, Congressional Republicans and the Democratic president signed a historic budget agreement on the eve of the debt ceiling vote. Three years later, the budget has been in balance for three years in a row – the only time we haven’t had a deficit in the past 50 years. Then in 2011, House Republicans took advantage of a debt-ceiling vote to win President Barack Obama’s approval of the Budget Control Act, which included automatic spending cuts and deficit reduction.

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The lesson is clear: If we are to make any progress in reducing the debt crisis, House Speaker Kevin McCarthy must use the debt ceiling vote as a bargaining chip to secure spending cuts and reforms.

It’s what the Inside-the-Beltway crowd has called wildly irresponsible — like holding the country hostage. wait. If a business owner is several million dollars in debt and goes to the bank for a loan or credit card extension, the bank will rightly say: What is your financial plan for getting out of debt? If there is no plan, they will drive the landlord out into the street with no loan and no credit card extended.

To rein in the debt, House Republicans will have to resist spending demands from top Democrats including President Joe Biden.

To rein in the debt, House Republicans will have to resist spending demands from top Democrats including President Joe Biden.

We all hope it doesn’t come to that, but if for some reason pessimistic Democrats refuse to budge and the debt ceiling isn’t raised in a timely manner, it doesn’t cause a debt default. Instead, it immediately forbids Congress to borrow more money. She can still spend the tax money that comes into the treasury every day – but not a penny more. Republicans are working on a contingency plan that will ensure debt payments are met and Social Security checks out as a top priority. But other low priority programs – such as the Department of Education, foreign aid, energy programs and so on – will be closed until a deal is reached. There is no default — unless Biden’s Treasury Department allows a default.

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House Republicans can make the case that most of the increase in debt over the past two years is due to Biden and the Democrats in Congress spending the $4 trillion we don’t have — most of that spending happened with few if any Republican votes. The Democrats own this excess debt.

But if the Republicans agree to move forward by raising the debt ceiling without any concessions from the Democrats, they will help and abet Biden’s big government socialist agenda. And this, ladies and gentlemen, is going to be America’s greatest financial crisis ever.

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