Annotating Obama’s 2006 Speech Against Boosting The
Debt Limit
(By Glenn Kessler,
The WashingtonPost, 15 January 2013)
“I think if you look at the history,
getting votes for the debt ceiling is always difficult, and budgets in this
town are always difficult.”
— President
Obama, news conference, Jan. 14, 2013
“The fact that we are here today to debate
raising America’s debt limit is a sign of leadership failure. It is a sign that
the U.S. government can’t pay its own bills. ... I therefore intend to oppose
the effort to increase America’s debt limit.”
As the saying
goes, “where you stand depends on where you sit.” This is certainly true of the
votes to boost the national debt limit, where almost by tradition, the party not holding the
presidency refused to support an increase in the debt limit. (One big exception,
as we have noted, is in 1953 during the Eisenhower presidency.) The president has acknowledged that his previous vote against the debt
limit was “a political vote.” On Monday, at a news conference, he urged
lawmakers to boost the debt limit without conditions: “We’re going to have to
make sure that people are looking at this in a responsible way, rather than
just through the lens of politics.” (In other words, don’t do what I did back
when I was a lawmaker.)
In making his
case, Obama noted: “The debt ceiling is not a question of authorizing more
spending. Raising the debt ceiling does not authorize more spending. It simply
allows the country to pay for spending that Congress has already committed to.”
He added that he was willing to have a “conversation” about reducing the
deficit, but the debt limit was not the right vehicle. With that in mind, we were curious to look
back at Obama’s 2006 speech and examine the case he made at the time for not
supporting a boost in the debt limit. Below is the entire speech. At key
points, we will offer commentary or further explanation.
Obama’s 2006 Speech On The Debt Limit
“Mr. President, I
rise today to talk about America’s debt problem. The fact that we are here
today to debate raising America’s debt limit is a sign of leadership failure.
It is a sign that the U.S. government can’t pay its own bills.”
Here, Obama is
sounding a bit Tea Partyish.
“It is a sign that we now depend on ongoing financial assistance from
foreign countries to finance our government’s reckless fiscal policies. Over
the past five years, our federal debt has increased by $3.5 trillion to $8.6
trillion. That is ‘‘trillion’’ with a ‘‘T.’’ That is money that we have
borrowed from the Social Security trust fund, borrowed from China and Japan,
borrowed from American taxpayers.”
Obama’s
language is remarkably similar to charges made by the Mitt Romney campaign against Obama during the
2012 election, though Romney mostly focused on the debt held by China. (Japan was
ignored.) When Obama took office in the midst of the Great Recession, the total
national debt was $10.6 trillion; it is now $16.4 trillion.
“And over the
next five years, between now and 2011, the president’s budget will increase the
debt by almost another $3.5 trillion.”
It actually
increased $5 trillion by the start of fiscal 2011.
“Numbers that
large are sometimes hard to understand. Some people may wonder why they matter.
Here is why: This year, the federal government will spend $220 billion on
interest. That is more money to pay interest on our national debt than we’ll
spend on Medicaid and the State Children’s Health Insurance Program. That is more money to pay interest on our debt
this year than we will spend on education, homeland security, transportation
and veterans benefits combined. It is more money in one year than we are likely
to spend to rebuild the devastated gulf coast in a way that honors the best of
America. And the cost of our debt is one of the fastest growing expenses in the
federal budget.”
Despite the
increase in the debt the past seven years, interest costs actually have
dropped, to about $200 billion a year, because interest rates have fallen so
much during the economic slowdown. But if interest rates go up again, interest
expense will soar.
“This rising debt
is a hidden domestic enemy, robbing our cities and states of critical
investments in infrastructure like bridges, ports and levees; robbing our
families and our children of critical investments in education and health-care
reform; robbing our seniors of the retirement and health security they have
counted on. Every dollar we pay in
interest is a dollar that is not going to investment in America’s priorities.
Instead, interest payments are a significant tax on all Americans — a debt tax
that Washington doesn’t want to talk about. If Washington were serious about honest
tax relief in this country, we would see an effort to reduce our national debt
by returning to responsible fiscal policies.”
“But we are not
doing that. Despite repeated efforts by Senators Conrad and Feingold, the
Senate continues to reject a return to the commonsense pay-go rules that used
to apply. Previously, pay-go rules applied both to increases in mandatory
spending and to tax cuts. The Senate had to abide by the commonsense budgeting
principle of balancing expenses and revenues.
“Unfortunately,
the principle was abandoned, and now the demands of budget discipline apply
only to spending. As a result, tax breaks have not been paid for by reductions
in Federal spending, and thus the only way to pay for them has been to increase
our deficit to historically high levels and borrow more and more money. Now we
have to pay for those tax breaks plus the cost of borrowing for them. Instead
of reducing the deficit, as some people claimed, the fiscal policies of this
administration and its allies in Congress will add more than $600 million in
debt for each of the next five years. That is why I will once again co-sponsor
the pay-go amendment and continue to hope that my colleagues will return to a
smart rule that has worked in the past and can work again.”
The rules were
restored in 2010.
“Our debt also
matters internationally. My friend, the ranking member of the Senate Budget
Committee, likes to remind us that it took 42 presidents 224 years to run up
only $1 trillion of foreign-held debt. This administration did more than that
in just five years.”
This is also
similar to another line used by Romney against Obama during the 2012
campaign.
“Now, there is
nothing wrong with borrowing from foreign countries. But we must remember that
the more we depend on foreign nations to lend us money, the more our economic
security is tied to the whims of foreign leaders whose interests might not be
aligned with ours. Increasing America’s
debt weakens us domestically and internationally. Leadership means that ‘the
buck stops here.’ Instead, Washington is shifting the burden of bad choices
today onto the backs of our children and grandchildren. America has a debt
problem and a failure of leadership. Americans deserve better. I therefore
intend to oppose the effort to increase America’s debt limit.”
***
Reading the
speech seven years later, Obama is correct that it was a political vote. He
never really explains what he would do differently or how he would provide
leadership on reducing the deficit. He just decries the rising debt, though he
hints at possibly supporting tax increases, since he complains that tax cuts
have been deficit-financed.
After Obama
finished speaking, Sen. Charles Grassley (R-Iowa) rose to rebut his comments.
“Mr. President, I
urge my colleagues to vote in favor of final passage. Raising the debt limit is
necessary to preserve the full faith and credit of the U.S. government. We cannot as a Congress pass spending bills
and tax bills and then refuse to pay our bills. Refusing to raise the debt
limit is like refusing to pay your credit card bill — after you’ve used your
credit card. The time to control the
deficits and debt is when we are voting on the spending bills and the tax bills
that create it. Raising the debt limit is about meeting the obligations we have
already incurred. We must meet our obligations. Vote for this bill.”
Here, Grassley
has found his inner President Obama. The increase in the debt limit passed on a
vote of 52 to 48, with a handful of Republicans joining all Democrats
(including then-Senators Joe Biden and Hillary Rodham Clinton) in opposition.
(Grassley has no great record on the debt ceiling, generally voting
for increases when Bush was president and against them when Obama was
president.)
The Pinocchio Test
This is why many
Americans hate politics. The young
senator from Illinois presumably did not want to buck the rest of his party
establishment in voting for increasing the debt limit — not when there were
just enough Republicans willing to support a president from their own party.
But Obama would be on much more solid ground today if he had given a speech
back in 2006 that sounded more like his news conference in 2013.
For making an
argument that the president now decries as politics, he earns the upside-down
Pinocchio, signifying a major-league flip-flop. (We have rarely given this
ruling, but are eager for other examples from readers.)
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