Will The Tea Party Bankrupt The United States?
On the Election Day early this month, I was watching coverage on MSNBC and happened across the victory speech from Rand Paul. Paul defeated Jack Conway to capture the Kentucky Senate seat vacated by the retiring Jim Bunning. He is also the son of 2010 Presidential candidate Ron Paul and a prominent member of the Tea Party movement.
Like other Tea Partiers, Paul is very much in favor of fiscal responsibility from our government both from Republicans and Democrats. In his speech, he used phrases like “enslaved by debt” and “debt crisis” to describe the government’s current federal spending policy and has vowed to take significant steps to tackle the nation’s debt issue. He may get his chance sooner rather than later.
Sometime in the next six months or so, the government’s outstanding debt will be approaching the debt ceiling. The debt ceiling essentially is the nation’s credit limit and currently stands at about $14.3 trillion. The government has approached the debt ceiling more than once in the past and whenever it’s happened Congress has simply passed a resolution to raise the limit.
But what might happen this time around? Let’s speculate for a second should Rand Paul decide to really stick to his guns.
Suppose that it’s the night before the government is scheduled to hit the debt ceiling. Congress convenes to pass a resolution to raise the ceiling again until Rand Paul steps to the microphone. Determined to keep Congress from continuing its free spending ways, he decides to filibuster the vote. As he continues to “debate” the topic, the deadline passes. As a result, the government’s debt goes into default and the nation’s credit rating could take a hit and the government would potentially be forced to shut down due to its inability to borrow money.
Will this scenario actually play out? Probably not but an increase to the debt ceiling is not a slam dunk. Tea Party senators like Jim DeMint have already gone on record stating that they will not support a debt ceiling increase. In the recent elections, one of the GOP’s main campaign platforms was fiscal responsibility and spending restraint. Now that they have control of the House, will they be able to drum up enough support to shoot down a debt ceiling increase and force the Democrats hands?
I ultimately think that the increase will still happen. The alternatives to raising the debt ceiling are less savory than increasing the deficit – borrowing from Social Security, borrowing from public employee retirement funds or using fed funds on deposit at banks. Those are fairly radical steps though and each would not only be costly from a political standpoint but also do little more than provide a temporary stopgap to needing to raise the debt ceiling. It’d just be much easier to raise the debt ceiling itself.
Republicans are going to have a chance in a few months to draw a real line in the sand when it comes to reining in government spending. The question is will they take it?
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