Debt Ceiling Demagoguery or Extortion?

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Once again this week, like he does whenever his worldview is challenged, Barack Obama tossed “hope and change” under the bus and embraced his “never let a crisis go to waste” strategy. “I cannot guarantee that those [Social Security] checks go out on August 3rd if we haven’t resolved this issue,” the president told CBS News anchor Scott Pelley, “because there may simply not be the money in the coffers to do it.” The president was referring to the ongoing battle over raising the debt ceiling, and this statement was, quite simply, an easily refutable lie. Yet it is a lie which has gone largely unchallenged by the mainstream media, which is leading an all-out effort to paint Republicans as the intransigent entity in these negotiations.

The truth? As Cato Institute Senior Fellow Michael Tanner points out, the U.S. Treasury estimates that they will collect approximately $203 billion in the month of August. During that same month, interest payments on the debt will total $29 billion. In other words, there will more than enough money to meet our interest obligations, as well as payments for Social Security, Medicare and military salaries. The real problem is that the government is scheduled to spend $307 billion the same month, leaving a shortfall of $104 billion.

Does this mean Grandma and Grandpa get stiffed on their Social Security? Only if Treasury Secretary Tim Geithner makes a conscious decision to do so. A 1985 Government Accountability Office (GAO) statement confirms that “the Secretary of the Treasury has the authority to determine the order in which obligations are paid should Congress fail to raise the statutory debt ceiling and revenues are inadequate to cover all the required payment.” In other words, Tim Geithner would be forced to prioritize his spending decisions.

And therein lies the essence of the gulf between the two political parties. While Republicans and Democrats are both ostensibly committed to deficit and debt reduction, it is Democrats and Mr. Obama who insist that “revenue increases,” aka higher taxes, must be part of the equation. Republicans refuse to go along, not because they’re interested in “protecting the rich” as Democrats claim, but because most of them believe that raising taxes puts Congress right back in its comfort zone of never having to prioritize spending decisions. They contend the lack of fiscal discipline, which raising taxes enables, is precisely why the country has amassed $14.4 trillion of debt. They also contend one other thing: the 2010 election was a referendum on the Democrats’ fiscal irresponsibility. One for which they got “shellacked.”

Democrats on the other hand, take great comfort in the fact that the president’s class-warfare rhetoric, recently illuminated by his determination not to “compromise your kids’ safety so some corporate-jet owner can get a tax break,” resonates with a substantial portion of Americans. Democrats also refuse to make any changes in Medicare, believing it gives them the upper hand on the issue heading into the 2012 election. They believe their success in capturing a long-time Republican seat in New York’s 26th congressional district as a result of their “Medi-scare” campaign, is a template for re-capturing the House. Adding to their intransigence is the belief that the media-abetted stories of utter devastation on August 2nd, characterized as “catastrophic economic consequences that would last for decades” by Geithner, or “real nasty consequences” by IMF head Christine Lagarde, will cause Republicans to capitulate.

Perhaps it already has. A new proposal by Senate Minority Leader Mitch McConnell would give president Obama unilateral power to raise the debt ceiling with no strings attached. The strategy here, which consists of a three-step debt ceiling increase in increments of $700 billion, $900 billion and $900 billion, would be to force Democrats to vote in favor of raising the ceiling three times, along with whatever spending cuts they decide to make. At the same time. Republicans could avoid voting for tax increases. This plan would coincide with the remainder of the president’s term in office. McConnel claims his intent is to “do the responsible thing and ensure the government doesn’t default on its obligations.”

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  • Jim

    ”I cannot guarantee that those [Social Security] checks go out on August 3rd if we haven’t resolved this issue,” Sounds like a threat to me and a to lot of old geezers.

    He has the power to decide who gets paid and with what money. The money is there ;if he doesn't send the checks out it is he who is to blame.

    • coyote3

      Interesting, that proves something. They have always insisted that social security is a protected fund. If a shutdown, because of the budget would cause the payments not to be made, then it is proof that social security is not protected, and it was either a ponzi scheme from the beginning, or they took money from it, albeit illegally, to pay for something else. By the way, he does not have the authority to hold up things like social security.

  • Carol Kelley

    As a recent retiree, when push comes to shove he can take my SS check and put it where the sun don't shine. Chuckie Schumer can do the same with the shuttle – sideways!! These bums should burn.

  • Reggie Greene

    During the last Presidential election, CSpan2 Book TV aired a program where the author discussed the results of his or her research, which suggested that something like 5-10% of Democrats , and 5-10% of Republicans, essentially debated and defined the ideological constructs of each party. The point was that the vast, vast, vast majority of the citizens of this country have their lives dictated by the most active and vocal members of society, who also happen to be more privileged .

    I strongly suspect that the same thing is occurring with the debt ceiling debate. The debate is not really about the debt ceiling per se, but rather a very deep, long-standing debate about the role and size of government. It’s never been resolved, and never will be resolved in our representative democracy. However, in the mean time, the regular folks in our society run the risk of being irreparably damaged. The elites (the upper and upper middle socio-economic classes) on each side of the fence have theirs, their corporate contributions, decent jobs and income, and will fare just fine economically. It’s the ordinary citizens (lower middle socio-economic class) who will most likely get screwed, no matter which side ultimately prevails in the short term.

    • David

      If the Republicans had the guts to do so, they could and should, point out that the size and scope of the federal government is defined in a document called the Constitution of the United States of America. If they followed that document, I believe the federal government would be at least 75% smaller than it is now.

    • Anamah

      This is not a representative democracy!!! The American system of government is thankfully a REPUBLIC, despite Democrats and some citizen who seem not to understand it. This administration is trying to erase something fundamentally important: The three branches of power, the only way to check and balance the others. Specially the executive must be controlled and this is what Democrats are forgetting. Also and most important all three must be under The National Constitution…and even that so basic is diminished. Many politic ignore it. But without our magnificent Constitution there wouldn't be America.

  • effemall

    His intransigence will be the end of him. His "cool" is getting less and less cool. It's a delight to see his ego suffer. He is learning about the meaning of "We, the People."

  • Cuban Refugee

    When the community organizer was selected to sit in the Oval Office, in the fog of hubris and ego, he assumed he would be king/dictator of a burgeoning banana republic. Like a spoiled little boy denied a toy, he is kicking and screaming his way to the realization that the American exceptionalism he denied is keeping him from bringing Venezuela to the U.S. Thank God for our representative government and for our Constitution, which will outlive Obama and other would-be tyrants who may come after him. Based on his very transparent desire to plunge our nation into chaos and subservience to a world government, after the budget talks: impeachment …

  • MBA NJ

    He is shallow yet his danger to our way of life has been repeatedly made clear. Impeach him and the other conspirators who seemed to allow the usurper into the office in the first place. THEY ARE AS GUILTY of treason as the puppet and the whole lot should be properly removed under the law so that other conspirators not be allowed to hurt our country with shenanigans. This is the same to me as folks only focusing on the inner city ghetto hand gun crime while the white collar criminal who has folks mow his lawns gets away with worse crimes. Terrorists who fight us in the streets are bad, but so are the white collar enemies of our country. Both categories must be removed.

  • StephenD

    Suddenly he is concerned. Yet, to this day, there is no Democratic Budget proposal ~ TO THIS DAY! He makes like the Republicans won't face the important issues. Never has he "scolded" his own party for failing to pass a budget. He is not naive. He knows EXACTLY what he is doing. There is an agenda that he is sticking to down to the letter. He is doing what any true America hating, Socialist, Islamist would do in order to usurp the Exceptionality of the American way of life.

  • Asher

    Senator McConnell said, "The President is all Smoke and Mirrors." Indeed Deception, Corruption, and Backroom Deals rules his Presidency. Threats of cutting Social security, medicare, weather updates, and pensions for the Military are also part of manipulation and intimidation tactics to force Republicans to raise the Debt Ceiling without substantial spending caps and Cuts put into place. Collapsing the economy, gaining control of banks and the auto industry, Healthcare, shutting down drilling, amnesty for illegals, and trying to shut down Fox news appears to be the actions of a Dictator who wants AMerica to be a 3rd World country. Hitler's primary rules were: Never allow the public to cool off, never admit a fault or a wrong; never concede that there may be some good in your enemy; never leave room for alternatives; never accept blame; concentrate on one enemy at a time and blame him for everything that goes wrong; people will believe a big lie sooner than a little one, and if you repeat if frequently enough people will sooner or later believe it….Hitler believed in the Power of lying to advance his agenda.

  • DogWithoutSlippers

    He forced the Stimulus through with the use of threats "The sky is falling" and now he's threatening Seniors. We are made of stronger fiber than Obama can possibly image. These threats do not go unnoticed and we'll rejoice in his demise, political or otherwise. When he's out of office his benefits should be cut off totally! His point and blame tactics are getting tired. In fact, there should be absolutely no benefits for politicians once they leave office – they are all rich to start with and can afford to pay their own way. This would open up the doors for caring citizens who will work to benefit this Great Nation!

  • DogWithoutSlippers

    The people in the hood are easy to sway…………….well this ain't the
    hood, Barry. Take your community organizing skills and shoove it!

  • coyote3

    We are already going to have a round of tremendous and extreme tax increases, beginning in 2012, and really escalating in 2014. These tax increases are going to victimize everyone, regardless of income, and they are largely for illegal purposes. They are going to victimize the people "deamed" wealthy, who already pay most of the income taxes.

    That said, legislation takes both houses of Congress, but the House or Representatives, and only the House of Representatives, votes to fund, on its own, and can likewise defund on its own. Why don't they just start defunding programs. Not everything at once. Start defunding something that the President likes, but not something really big, yet. When he makes a silly statement, or pouts, ratchet up the defunding a little bit. Who knows maybe if we are lucky, the programs would never get funded again? Likewise, when agencies get testy with Congress, or when they appear to be operating illegally, i.e., constitutionally incorrect just reduce their funding. If the pout, or don't come back with hat in hat just defund it altogether. I am thinking, hoping, wishing, praying, BATF here.

  • ApolloSpeaks


  • ApolloSpeaks


    The gist of what Obama said at the press conference yesterday was this:

    "If you Republicans continue to childishly oppose me and don't agree to do the unpopular thing and raise taxes on a weak economy (soaking the rich like Hoover did in the 1930s) then I'll be forced to do the unthinkable: I'LL OPT FOR ARMAGEDDON and blow up everything. I warn you GOP if I don't get my way on tax hikes to cut the huge deficit (caused by my reckless spending) I'll default on the debt and plunge the nation into a second Great Depression (the one I saved you from with my stimulus); and it will be on your heads."


  • ApolloSpeaks

    This was the message of a president who said in the same breath that his "50th birthday was next week" when it's three weeks away; and that 80% of Americans (including most Republicans) support his "balanced" approach to solving the debt crisis (though he's against balancing the budget). Should we fear what Obama said and take him seriously? HELL NO! What we saw was empty fearmongering by a weak man ready to cave. It's like the Freudian slip that he made to Eric Cantor when he walked out on him Wednesday, "Don't call my bluff…..," he said. Because that's what he's doing, HE'S BLUFFING.

    Click my name (or Google ApolloSpeaks) to read my widely linked Townhall piece, Barack Obama and the Crack Up of LIberalism.

  • bob maram

    The spending sprees of out of control governments is akin to a party where most of the guests are happily drinking from the punchbowl of excess until the only sober guest at the party wisely and courageously removes the punchbowl from the room. Who is the person with sobriety, wisdom and courage that we should invite to the party in 2012. bob maram

  • Dispozovdaburka

    "The facrt that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign the the US Government can not pay it's own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government's reckless fiscal policies. 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." Senator Barack H. Obama, March 2006

  • quark1912

    If the U.S. administration and Congess keep raising the debt ceiling instead of dealing with the spending problem by 2020 twenty precent of the G.N.P. of every country in the world will be required to finance it. While in theory this is possible so is me dating Mila Kunis and just as unlikely.

  • WilliamJamesWard

    The greatest ongoing criminal enterprise in the World and in World History is
    the Obama administration and Washington has become the District of Criminals
    in deed. No matter what Obama does it is to the hurt of America and the
    citizenry. I save what I can to get by in the near future, Obama is making the
    hard work that went into frugality a loss of value, we are being devalued and
    all we have will have a 0$ value and we will float in a sea of red ink, the
    Communists will love that, Islamists, leftists and evil men will have made their
    playground of destruction. I prefer to fight back, keep on thinking conservative
    thoughts and hope Americans will undo what has happened and take the
    necessary steps to remove the leftist enemies of America from any position to
    undermine our lives……………………………………………………William

    • Cuban Refugee

      I heartily agree with your every word and conservative thought, WilliamJamesWard … thank you.

      • WilliamJamesWard

        I hope I live long enough that the majority of people I speak with will
        have your thoughts and emphasis on clearly seeing what is in front
        of them………If only those who could would act to intervene in our
        pending disaster…………………………..Regards, William

    • John

      Trickle down economics is truly "the greatest onging criminal enterprise in the World and in World History".

  • Len Powder

    Rahm Emmanuel and Obama decided even before they occupied the WH that they were going to manufacture one crisis after another in order the accomplish their agenda. Over 2 years later this is the operating mode of the Obama Regime. The Bolsheviks exploited Russia's entry into WWI to overthrow the Czar. Hitler exploited the Reichstag fire to suppress liberties in Germany. Obama and Company, Inc. manufacture Crises to keep the American people constantly anxious about their welfare and survival. Such techniques are used by would-be dictators and tyrants, not Presidents of the United States – until Obama came along.

    • Jim_C

      "Manufacture" crises?

      You should try reality, sometime.

    • John

      Did you live through the Patriot Act, suspension of Hebeus Corpus, use of torture and rendition and the invasion of Iraq under Bush Cheney?

  • Tanstaafl

    This should be a wake-up call to anyone who receives money (subsidies, tax breaks, checks and benefits) that that what the government gives you – IT CAN TAKE IT AWAY. Especially if you don't do as they ask.

  • Wesley69

    Before we need to even listen to this man, we need to remember these are things our "dear leader" is responsible for. WE THE PEOPLE need to keep this in mind when he brings his case to the people.

    After your $1 trillion Stimulus and your cash for clunkers & other programs which did not turn the economy around, the the current state of the economy belongs to you.
    Because of your Green Energy, anti-oil, gas, coal policies that have lead to high fuel prices belong to you.
    The huge unemployment numbers belongs to you.
    The increased number of people on food stamps belongs to you.
    The lack of busines investment belongs to you.
    The decline in housing values belongs to you.
    The continued high home foreclosures belongs to you.
    The higher deficit belongs to you.
    The regulations that restrict business belongs to you.
    The unions trying to force card check on industry belongs to you.
    The situation where Arizona was sued by the US government because Arizona was trying to protect their citizens against an illegal invasion belongs to you.
    The immigration crisis and lack of border security, which has lead to American deaths, belongs to you.
    Trying to make the war on terror a law enforcement belongs to you.
    Trying to bring the terrorists in Gitmo to trial in US courts where they have American rights belongs to you.
    The fact that terrorist has been Mirandized belongs to you.
    The fact that terrorists are killed or let go, but not incarcerated in Gitmo belongs to you.
    The groping of children & insane body searches which clearly violate privacy that takes place at airports belongs to you.
    The fall of Egypt to the Milants and that YOUR GOVERNMENT may have had a hand in toppling Mubarak, an ally for 30 years, belongs to you.
    The destruction of the Egyptian-Israeli Peace Treaty, when it happens, belongs to you.
    The empowerment of the Muslim Brotherhood, with the idea of a Islamic Caliphate, across the Mideast belongs to you.
    When, not if, Iran develops nuclear weapons belongs to you.
    The destruction of the peace process in the Mideast, where you backed negotiations between Israel and the Palestinians based on the 1948 Armistice Lines, causing the Palestinians to demand more belongs to you.
    The destablization of Iraq and Afghanistan belongs to you.
    The end of the manned space program belongs to you.
    Increased racial tensions belongs to you.
    The fact that the Black middle class is disappearing and Blacks in general have the highest rates of unemplyment belongs to you.
    The corrupting influence of George Soros in US policy belongs to you.
    The enemic growth of the economy belongs to you.
    The decline in the value of the dollar due to quantitative easing belongs to you.
    The coming hyperinflation belongs to you.
    Guns being sold, in the operation called Fast & Furious, that wind up in the hands of Mexican drug lords and the murder of border guards belongs to you.
    The coming rationing that will accompany Obamacare belongs to you.
    The fact that everyone by law will have to buy health insurance or pay a stiff fine belongs to you.
    The fact that doctors are leaving the profession is droves because of ObamaCare belongs to you.
    The fact that you had your party ram ObamaCare through without needed discussion, study and transparency belongs to you.
    The socialist takeover of one-sixth of the economy by way of ObamaCare belongs to you.
    The stimulus package that added about $1 trillion in spending to the deficit belongs to you.
    The unbelievable waste associated with that stimulus that did not stimulate belongs to you.
    The use of Czars that do not answer to Congress, but only to you, belongs to you.
    The policies of demoralization of the armed forces belongs to you.
    The delay in the surge, but the immediate announcement of the withdrawal of US forces in Afghanistan, encouraging the Taliban, belongs to you.

    • John

      Most of this stuff really belongs to the Tea Party and Republicans. It's called "starving the beast"

  • Anamah

    He is a complete and dangerous bluff. All the group who owned and selected as a fake Messiah from his preparation as community organizer is a lethal Machiavelli fraud to freedom.

  • John

    Congratulations to the Republican party on turning "Of the people, for the people, by the people" into just another lie. Today they will pass a vote in the house to permanently institutionalize greed.