One day after New York Times columnist and Nobel Prize-winning economist Paul Krugman described Republican brinksmanship on the debt ceiling as "hostage-taking," President Obama used his Monday press conference to declare, "They will not collect a ransom in exchange for not crashing the American economy." But you don't have to take their word for it that the GOP is holding the U.S. economy captive with its unprecedented refusal to raise the U.S. debt ceiling. Just listen to Senate Minority Leader Mitch McConnell, who in August 2011 crowed that the debt ceiling is "a hostage that's worth ransoming."
Nevertheless, the kamikaze conservatives who would sink the American ship of state if their demands for draconian spending cuts are not met are pretending that Republican willingness to trigger the first-ever U.S. default is no different than past no votes of individual Democratic senators. But as the likes of Karl Rove and Byron York well know, in 2004 and 2006 Republicans had a majority in both the Senate and the House of Representatives. Put another way, Democrats not only didn't threaten to block a debt ceiling increase, they didn't have the numbers to do it.
Of course, you wouldn't know that by reading the recent screeds of Karl Rove:
"There may be no person in America with less moral authority than Mr. Obama on this issue. Six years ago he led a Democratic effort to defeat a $781 billion debt-ceiling increase."
On Saturday, Rove's reliable water-carrier Byron York echoed the same point about that 2006 debt limit hike. "Declaring themselves outraged by such spending, Reid, Durbin, Schumer, and Murray all voted against raising the debt limit. So did every other Democrat—including Sen. Barack Obama." York went on to note:
In the summer of 2011, during the last debt ceiling fight, Reid conceded his '06 vote was all about politics. "I shouldn't have done that," he told ABC's Jonathan Karl. "I'm kind of embarrassed I did. It was a political maneuver by we Democrats."
But York left out Reid's next sentence
from that ABC interview:
"The Republicans were in power - there were more of them."
And that difference makes all the difference.
(Continue reading below the fold.)
Republicans in 2006 enjoyed majorities in both the House (232-203) and the Senate (55-45). As Reid rightly pointed out, "The Republicans were in power—there were more of them." To be sure, Democrats were trying to score political points at President Bush's expense. But there were no threats, no filibusters and no risk to the full faith and credit of the United States.
Which is what makes the GOP's hostage-taking so unique. Whether motivated by opposition to larger spending or tax legislation, or as a symbolic vote to embarrass the president and his Congressional majority (as Sens. Obama and Reid did in 2006), the 40 debt ceiling increases since 1980 have rarely been unanimous. But never before has the threat to block a debt limit increase been coupled with one party's intent and ability to actually do it. After all, while Republican Speaker John Boehner has the numbers to deny a debt ceiling increase in the House, Senate Minority Leader Mitch McConnell can prevent it from even coming to a vote. Of course, when George W. Bush sat in the Oval Office, GOP leaders including Boehner, McConnell, Paul Ryan, Eric Cantor and John Cornyn didn't just vote for seven increases in the debt ceiling. In November 2004, they all voted for the very kind of "clean" debt ceiling bill they refuse to offer President Obama now.
After having increases the national debt by 40 percent since his inauguration in January 2001, President George W. Bush in October 2004 called for his fourth hike in the nation's borrowing authority. His Treasury Secretary John Snow warned, "Given current projections, it is imperative that the Congress take action to increase the debt limit by mid-November," adding that his arsenal of fiscal tools, including tapping money intended for the civil service retirement fund, "will be exhausted."
But as the New York Times explained on November 17, 2004, Bush had to wait for his debt ceiling increase for a very simple reason:
Though an increase in the debt ceiling was never in doubt, Republican leaders in both houses of Congress postponed action on it last month, until after the elections, to deprive Democrats of a chance to accuse them of fiscal irresponsibility.
With his reelection safely secured, Republicans delivered Bush's debt ceiling increase in a stand-alone bill, with no conditions, no threats and no poison pills. By 52-44 in the Senate and 208-204 in the House, Republicans led Sen. Bill Frist (R-TN) and Speaker Dennis Hastert (R-IL) boosted the borrowing limit from $7.4 trillion to $8.2 trillion. Over 100 current Republican members of Congress voted "aye." Among them were the today's top two Senate Republicans (Mitch McConnell and John Cornyn) and the entire House leadership team (Boehner, Eric Cantor and Paul Ryan).
And just why did President Bush and his allies insist that 11 percent increase was needed?
Administration officials contend that the annual deficits are undesirable but necessary to help stimulate an economic recovery and fight a global war on terrorism.
As Speaker Hastert's spokesman John Feehery put it just before the House vote:
"We have an obligation to keep the government in operation."
In their rare moments of candor, Republican leaders acknowledge as much
. Failure to raise the debt limit, Speaker John Boehner cautioned in January 2011, "would be a financial disaster, not only for our country but for the worldwide economy." Paul Ryan, whose 2012 House GOP budget would add $6 trillion in new red ink over the next decade, agreed that "you can't not raise the debt ceiling." Lindsey Graham, who has repeatedly demanded Obama "man up" on spending cuts, explained why:
"Let me tell you what's involved if we don't lift the debt ceiling: financial collapse and calamity throughout the world. That's not lost upon me. But we've done this 93 times. And if we keep doing the same old thing, then that is insanity to the nth degree."
Apparently, that "same old thing" doesn't apply when a Republican
is sitting in the Oval Office. It's not just that Ronald Reagan presided over 17 debt limit hikes and a tripling of the national debt during his eight years in the White House or that President George W. Bush nearly doubled it again. The end-of-decade $5.6 trillion surplus forecast by the Congressional Budget Office in 2000 was more than eviscerated by two unfunded wars, two rounds of Bush tax cuts, the unpaid-for Medicare prescription drug benefit and the TARP bank bailout. To accommodate those "spend and not tax" policies, Bush and his GOP allies in Congress voted seven times to raise the U.S. debt ceiling. (That vote tally included a "clean" debt ceiling increase in 2004, backed by 98 current House Republicans and 31 sitting GOP senators.) And as it turns out, Senate Minority Leader Mitch McConnell (R-KY), House Speaker John Boehner (R-OH) and House Majority Leader Eric Cantor (R-VA) voted for all of it.
During the GOP's first debt ceiling hostage-taking in the summer of 2011, U.S. consumer confidence plunged and hundreds of thousands of jobs lost while Uncle Sam racked up almost $2 billion in unnecessary interest payments. As for the uncertainty and credit rating downgrade the debt ceiling debacle produced, S&P pointed the finger at the GOP, the only party willing to countenance a default by the United States:
A Standard & Poor's director said for the first time Thursday that one reason the United States lost its triple-A credit rating was that several lawmakers expressed skepticism about the serious consequences of a credit default -- a position put forth by some Republicans. Without specifically mentioning Republicans, S&P senior director Joydeep Mukherji said the stability and effectiveness of American political institutions were undermined by the fact that "people in the political arena were even talking about a potential default," Mukherji said. "That a country even has such voices, albeit a minority, is something notable," he added. "This kind of rhetoric is not common amongst AAA sovereigns."
That's exactly right. That kind of rhetoric is not common amongst AAA sovereigns and unheard of among Democrats. But among Republican leaders, holding the American economy hostage is just another day at the office. After his first round of debt limit extortion, Senate Minority Leader Mitch McConnell boasted in August 2011:
"I think some of our members may have thought the default issue was a hostage you might take a chance at shooting," he said. "Most of us didn't think that. What we did learn is this -- it's a hostage that's worth ransoming. And it focuses the Congress on something that must be done."
And as he later explained to CNBC's Larry Kudlow, McConnell's future hostage-taking isn't a threat, but a promise:
"What we have done, Larry, also is set a new template. In the future, any president, this one or another one, when they request us to raise the debt ceiling, it will not be clean anymore. This is just the first step. This, we anticipate, will take us into 2013. Whoever the new president is, is probably going to be asking us to raise the debt ceiling again. Then we will go through the process again and see what we can continue to achieve in connection with these debt ceiling requests of presidents to get our financial house in order."
A new template, indeed. Because while the minority party in Congress has often voted against debt ceiling increases, it never had the either the numbers or the intent to blackmail the president. Until, that is, Democrat Barack Obama entered the Oval Office.