Lawmakers Once Again Are Kicking Can Down the Road
February 3, 2012 (Reading Eagle, Pa.) The Issue: Congress postpones action on the debt limit until May.
Our Opinion: The delay will do nothing to resolve the problems.
How appropriate it was that during the week before the Super Bowl, Congress opted to punt, once again kicking the nation's financial problems down the road.
House Republicans, still stinging from the battle over the so-called fiscal cliff that resulted in, among other things, a tax increase on those Americans with the largest incomes, proposed to suspend enforcement of the federal debt limit to May 18 in an effort to buy lawmakers a little breathing room before engaging President Barack Obama in another round of spending cuts in the likes of Social Security, Medicare and Medicaid.
The White House and Senate Majority Leader Harry Reid agreed to the proposal, which will do nothing to resolve the need to raise the debt limit. Nor will it reduce the deficit spending by the federal government.
Such a move might make sense if the two sides were close to an agreement and simply needed to work out a few details before trying to convince rank-and-file lawmakers to go along with the deal. But they are not. In fact they are so far apart, and each side is so entrenched in the belief that its stance is correct, that the delay only will allow each faction to dig its heels deeper into the sand.
The issues have not changed. Nor will they by May 18 unless one side or the other opts to abandon its position.
The first is that the United States has reached its debt limit of $16.4 trillion. This is the money the nation borrows in order to pay the bills that Congress already has approved. Just the threat in 2011 of not increasing the debt limit prompted Standard & Poor's to reduce the country's credit rating from AAA to AA+.
If Congress fails to raise the limit, it would mean a government shutdown: No checks for Social Security recipients, no Medicare payments to doctors or hospitals and no paychecks for 1.4 million members of the military or the 3 million or so other government workers.
Despite that, some House Republicans want to hold the nation hostage. They said they won't vote to increase the debt limit unless Democrats agree to spending cuts on social programs. Meanwhile Democrats, led by the president, have said they adamantly refuse to balance the federal budget on the backs of the elderly and the poor.
There can be no doubt that something must be done. No nation can proceed indefinitely borrowing money from future generations. A business that borrows more than it generates year after year won't be in business very long. A family that does the same thing soon would find itself with a very poor credit score and probably facing a bankruptcy filing.
We only can repeat a 2011 quote made by BlackRock, an investment management firm based in New York City:
"Addressing the fiscal challenges that confront the United States is a long-term undertaking. Those challenges cannot be overcome through short-term fixes but will require efforts extending over many years. The U.S. economy historically has been the world's most resilient, but its future depends on policymakers coming together to make the hard decisions needed to arrest the growth of the U.S. public deficit. There is time to address these challenges, but if policymakers fail to do so, the credit downgrade will be a sign of continued fiscal deterioration."