In 2006, then-Senator Barack Obama opposed raising the debt ceiling, saying, “Increasing America’s debt weakens us domestically and internationally.” He noted, “America has a debt problem and a failure of leadership. Americans deserve better.”
Seven years later, with America over $16.7 trillion in debt, President Obama has added more to that number than every President since George Washington combined. And the debt ceiling continues rising to outer space.
To combat this, along with the more than 500,000 members and supporters of Citizens United nationwide, I support the “Full Faith and Credit Act” (H.R. 807 and S. 46). Citizens United is proud to stand with the Republican Study Committee in their endorsement of this important bill, being sponsored by Representative Tom McClintock of California and Senator Pat Toomey of Pennsylvania.
America’s elected leadership is set to embark upon another heated debate over raising the debt ceiling, our government’s statutory borrowing limit. With partisan gridlock regrettably expected in the run up to the deadline, it is critical for the American economy that we preserve the nation’s creditworthiness. This can only happen by eliminating the potential of default on all federal debt obligations.
If the debt ceiling isn’t raised on time, the Full Faith and Credit Act will require the first payments made by United States Treasury would always be on existing debt. Because the Office of Budget and Management (OBM) estimates the federal government brings in approximately 10 times more than its liabilities, this will require the Federal government to use its substantial resources to pay creditors in full and on time.
Last time we had this debate, thanks to the excessive discretion given to the White House, President Obama was able to create a false sense of urgency and panic while holding America’s economy hostage to support his reckless spending priorities. This time, not only does President Obama plan to threaten default, he will use this political tactic in hopes of eliminating the debt ceiling entirely, giving him a limitless credit card to push an extreme liberal agenda and expand federal spending to catastrophic levels.
The debt problem is so severe, that if liberals and wayward Republicans do not make the hard decisions, fiscal discipline will be forced on them through the credit markets.
Credit rating agencies such as Egan-Jones and Standard & Poor’s have already downgraded the credit rating of the federal government, which directly impacts interest rates and the financial markets.
This trend of downgrades, if allowed to continue, would make it more expensive for government to borrow money. In laymen’s terms, this means that if Congressional liberals and wayward Republicans do not make the hard choices needed to reduce America’s deficit, then market forces will force their hand in the most drastic way imaginable. Because default would lead to rapid inflation and long-term devastation to the private sector, this is a scenario that America must avoid.
America has a spending problem that must be stopped and reformed. Tax revenues are set to reach record levels this year, and there is no reason to allow the Obama Administration to avoid paying America’s pre-existing debt obligations.
Republicans must be proactive now to win the debt ceiling message debate by taking reasonable legislative steps and combating the Obama Administration’s deceptive demagoguery while maintaining the already-diminishing confidence the world has in America’s Treasury bonds.
I applaud Congressman McClintock and Senator Toomey for their leadership on this bill. Congress should pass the Full Faith and Credit Act immediately.