“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.”
“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.
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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