The United States Debt Limit Explained – (CR) Heritage Foundation
Heritage Action is a “no” and will remain a “no” unless a deal rises to the level of the substantial fiscal challenges which face our nation.
Debt negotiations are intensifying and conservatives are growing increasingly skeptical that the Obama administration and Democrats in Congress are willing to do what it takes to put America back on a path to prosperity. On Wednesday, Heritage Action’s CEO Michael A. Needham sent a letter to Congress outlining our position on the debt ceiling.
The text of the full letter is below:
June 29, 2011
Over the next month, you will face tremendous pressure to accept a deal to raise our nation’s debt ceiling. Heritage Action for America will key vote the deal to raise the ceiling.
Heritage Action is a “no” and will remain a “no” unless a deal rises to the level of the substantial fiscal challenges which face our nation. A deal to raise our debt ceiling must include historic reforms that will save the American dream for our children and grandchildren. The Heritage Foundation laid out what such a package might look like: 1) cut current spending; 2) restrict future spending; and, 3) fix the budget process. Currently, there is only one plan on the table that meets this test and that is the plan embodied in the Cut, Cap and Balance Pledge. This is an example of a plan that matches the historical moment that we currently face as a nation.
In order to achieve reforms of this magnitude, Congress must do everything possible to eliminate the uncertainty surrounding Treasury Secretary Timothy Geithner’s August 2 deadline. Congress cannot negotiate with a clear mind if the administration is constantly invoking the specter of default. As Heritage Foundation economist J.D. Foster, Ph.D. points out:
Both immediately and long after it reaches the debt limit, the government would have far more than enough revenue coming in that the Secretary of the Treasury could use to pay interest on the debt. Nor would preserving the current debt limit put at risk the full faith and credit of the United States government, as the President’s chief economic adviser has claimed. The government would continue to pay net interest as it comes due.
In the event that liberals will not allow us to raise the debt ceiling because they cannot stomach substantive, systemic changes to put the country back on sound footing, conservatives must develop a responsible plan. Congress must exercise their constitutional power of the purse, building upon the framework of the Toomey-McClintock legislation, and prioritize federal spending.
Finally, Heritage Action will require at least 72 hours to review the details of any deal to increase our nation’s debt ceiling. The Washington inclination to go behind closed doors and strike a grand deal is unacceptable. Heritage Action, and the hundreds of thousands of Americans we represent, demand transparency and accountability. Americans must feel confident their Members of Congress understand what they are voting on. There must not be another “pass the bill so that we can find out what is in it” moment. We will reserve the right to score retroactively any vote if we are given less than 72 hours to review the details.
Our nation’s problems have grown so large they are impossible to ignore. If we allow the status quo to persist, or move forward with half–measures and gimmicks, we will be sentencing our children and grandchildren to permanent economic malaise while at the same time condemning this current generation to the same fate. Indeed, the crisis is not on the distant horizon. It is here now.
We have a unique opportunity and singular responsibility before us to change course. We must rise to the challenge of the moment.
Michael A. Needham
Chief Executive Officer