President Ronald Reagan
wrote Senate Majority
Leader Howard Baker to urge raising the debt limit
It's no surprise that congressional Republicans aren't listening to
warnings from the Obama administration about the perils of allowing the United States to default on its fiscal obligations by refusing to raise the debt limit. After all, if President Obama told Republicans to move to the right, they'd head to the left. It's just second nature to them.
But they should keep in mind that President Obama is not alone in calling for the debt limit to be raised. As ThinkProgress reminded us yesterday, so too did President Reagan:
The full consequences of a default — or even the serious prospect of default — by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar in exchange markets. The Nation can ill afford to allow such a result. The risks, the costs, the disruptions, and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns.
That was in 1983, and Congress ended up extending the debt limit, as they will do in 2011. But it's time for congressional Republicans to get their act together.
As of yesterday, we've actually run up into the debt limit. The only thing keeping the country's fiscal situation in order is a set of emergency measures that the Treasury Department has put in place. For example, the federal government is no longer contributing to employee retirement funds and it has stopped offering securities to help local governments reduce the cost of issuing bonds. These types of measures forestall an immediate crisis, but they don't make the issue go away.
Meanwhile, rank-and-file congressional Republicans are busy making the case that defaulting on our fiscal obligations wouldn't be a big deal, and they might be so clueless that they actually believe what they are saying. The GOP's congressional leadership says they understand the debt limit must be raised, but they haven't challenged their base. Instead of doing the logical thing and raising the debt limit, they have made a list of demands of what they must receive in order to do what they say they know they must do.
Republicans seem to think this is a replay of the tax cut debate, but unlike tax cuts, raising the debt limit is never a popular move. It's not the kind of thing that makes for a good hostage. As a result, Republicans just don't have the same leverage with the debt limit as they did on taxes, especially when their own financial backers have made it clear that they must raise the debt limit. So the correct move for Democrats is to sit back and wait for Republicans to come to their senses. Eventually they'll do it, and the sooner the better.