Secretary Tim Geithner says US will default on debt August 2 if debt ceiling not raised, John Brummett agrees (Part 5)

Rick Crawford does a great job of answering these questions from these liberal democrats that attempted the badger the congressman!!!!

Picture of Pat Toomey above.

Today  Thomas Fitzgerald of the Philadelphia Inquirer reported:

As the federal government hit its debt limit of $14.3 trillion Monday, Pennsylvania Sen. Pat Toomey said the Obama administration must accept substantial spending cuts to win congressional approval to borrow more money.

The Treasury Department began shuffling funds around, including stopping payments into pension accounts, and Secretary Tim Geithner said that such stopgap measures would last until Aug 2. If congressional leaders can’t reach a deal on raising the debt ceiling by then, the United States will default on its debt, Geithner said.

Toomey, a Republican and former investment banker, said such warnings were “scare tactics,” adding that a failure to raise the debt limit would be disruptive, but not catastrophic. The White House has said it wants Congress to bump up the limit without preconditions.

The situation is “like the family that is routinely spending more than their income and making up the difference running up credit cards – and when they reach the limit on their last credit card, the White House position is, ‘Throw another credit card at them,’ ” Toomey said in a luncheon speech to the Philadelphia chapter of the Federalist Society, an organization of conservative lawyers.

“My own view is, it’s time for an intervention,” he said.

A year’s worth of federal tax revenue is more than 10 times the government’s annual payments on its debt, Toomey said, so the nation would be able to avert default by making a priority of spending to pay interest on its debt first. In February, Toomey introduced the Full Faith and Credit Act, a bill that would require such an approach when the debt limit was exceeded.

“Instead of the scare tactics, they ought to be discussing the kind of reforms we can make to get on a sustainable fiscal path,” Toomey said after his speech at the Blank Rome law firm’s offices in Logan Square.

He favors a statutory cap on overall federal spending in the future as a condition for approving a debt-limit increase – an approach that House Speaker John Boehner has suggested as well. Spending cuts, Boehner said in a statement Monday, must be “greater than any increase in the debt limit.”

John Brummett in his article “Dear visa, my debt ceiling is capped,” April 25, 2011, Arkansas News Bureau, he asserted:

Nine times in the last decade the federal government has crept near its debt ceiling and Congress has voted to raise it.

Tea party types say they intend this time to tie their votes to raise the debt limit to actual and concurrent spending reductions.

But this is no equation. You absolutely owe your debt. Quite separately, it’s up to your future behavior whether you can fashion spending reductions to gain control of tomorrow’s debt so that you don’t have to keep dealing with these kinds of untenable financial and political situations.

Michael Tanner made some great observations in his article “Debt-Ceiling Myths,” National Review Online, May 11, 2011. 

Michael D. Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution. Here is a portion of this recent article: 

Now that Osama bin Laden has been successfully dispatched to the eternal damnation he so richly deserves, Washington is ready to return to the more mundane question of whether the Obama administration will be allowed to spend this country into oblivion.

The next big fiscal fight will be over when and how to increase the debt limit. The administration has been hard at work trying to shape the message and public opinion. Unsurprisingly, much of that message is less than 100 percent accurate. Here are some myths about the debt ceiling and the upcoming debate about raising it:

2. Failure to pass the debt-ceiling increase on time would be unprecedented. Both the administration and the media sound as if we are at the edge of zero hour, the time at which economic Armageddon will erupt if we have not raised the debt ceiling. That’s not quite so. It is true that Congress has never refused to raise the debt ceiling. But it has, in fact, frequently taken its time doing so. In 1985, Congress waited nearly three months after the debt limit was reached before it authorized a permanent increase. In 1995, four and a half months passed between the time the government hit its statutory limit and the time Congress acted. And in 2002, Congress delayed raising the debt ceiling for three months. In none of those cases did the world end. It won’t this time, either.

3. It’s always a “clean bill.” The administration is also insisting that it would be shocking for Congress to add any conditions to the debt-ceiling increase. But such conditions are far from unprecedented. There have been numerous amendments and conditions attached to debt-ceiling bills throughout the years. Remember Gramm-Rudman-Hollings? The classic spending-control plan was added to the debt-ceiling vote in 1985.

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