Likely at the last minute, the Senate will send its own bill to the House as “the only bill that can pass the Senate” and dare the House to defeat it. If the Reid bill is defeated, they will blame Republicans for obstructing it, and pin any ensuing economic calamity at their feet.
That is why the Senate has thus far refused to pass a plan of its own.
If Republicans capitulate to the Senate plan, and vote for it, the White House can live with that too. When the U.S. has its credit rating downgraded, they will attempt to make House Republicans own it — no matter how members voted.
Democrats will peddle the lie, as they have already begun, that the cause for the downgrade was because of political intransigence to raising the debt ceiling.
In reality, it will have been because the plan enacted did not do enough to slow down the growth of the debt. We are on a fiscally unsustainable trajectory the nation is on. Moody’s looks at the percent of revenue interest payments amount to, while S&P looks at debt to GDP. Both are warning of a downgrade.
S&P head of sovereign ratings David Beers told CNBC host Larry Kudlow that a failure to raise the $14.294 trillion debt ceiling “would not be default so long as the government is continuing to pay its debt as it matures and its interest payments.”
Which means August 2nd as a deadline to avert default is nothing more than a lie by Obama. Republicans have all but ceded that debate, however, and refuse to call Obama out.
The agencies are not rating Washington’s unwillingness to borrow more, but politicians’ reluctance to stop borrowing so much. Said Beers, “we’re rating debt.”
Meaning, whoever votes for a bill that ensures a downgrade — or signs it — owns that downgrade politically. Like the ancient Mariner who killed the ship’s good luck, the albatross, politicians will be made to wear AA as a shameful reminder of Washington’s greed, avarice, and profligacy.
It is a disgrace. All because Reid and Obama refused to cut at least $4 trillion, which amounts to less than $100 billion a year. In the end, the only bill that might have prevented a downgrade was the “Cut, Cap, and Balance” plan, which promised almost $6 trillion in cuts.
One day, history might remember the failure of “Cut, Cap, and Balance” as being the tipping point which propelled Washington into permanent dysfunction, decline, and one day, default.
Only a brave few will be remembered as having resisted Obama’s call to borrow more. They were the only ones who tried to steer the Ship of State from the stormy Abyss before we were swept under the currents of a debt that could not be paid.
The irony is the House, since it has already passed its plan, “Cut, Cap, and Balance,” need only do nothing and wait for the Senate. House Speaker John Boehner should just tell the Senate to either send back their idea for changes or pass it but otherwise, the House is done.
Bill Wilson is the President of Americans for Limited Government. You can follow Bill on Twitter at @BillWilsonALG.