The Daily Caller

The Daily Caller

Tea Partiers are the adults in debt ceiling debate

Photo of Matt Kibbe
Matt Kibbe
President, FreedomWorks

In his speech to the nation Monday, President Obama called for compromise on the debt ceiling debate, bemoaning that “compromise has become a dirty word” and waxing nostalgic that “America, after all, has always been a grand experiment in compromise.” He specifically attacked Republicans in the House of Representatives, who he said “refuse to consider this kind of balanced approach.” What the president, other establishment leaders and the media fail to understand, however, is that the Cut, Cap and Balance approach of House Republicans is the compromise.

A small handful of Tea Partiers and a few members of Congress have argued against raising the debt ceiling, period. Most realize, however, that the black hole of President Obama’s $1.5 trillion deficit is simply too deep to plausibly eliminate overnight and we will, regrettably, need to raise the debt ceiling to accommodate it.

The necessity of raising the debt ceiling creates a dilemma for pragmatic Tea Party freshmen who were elected to get spending under control. Tea Party voters would rather see fiscal discipline enacted without having to raise the nation’s credit limit, as anyone would. Most, however, understand that we can’t dig ourselves out of the ditch overnight and are willing to support an increase in the debt limit if — and only if — spending is cut and capped, and Congress seriously considers a balanced-budget amendment.

Obama and other Democratic leaders refuse to understand that this is a compromise. And it’s one a plurality of voters support, according to a recent CNN poll that found 45 percent of likely voters supported raising the debt ceiling only if accompanied by fiscal responsibility measures.

Despite being branded by the media as selfish, demanding or childish, the Tea Party has positioned itself as the responsible adult in the room. Cut, Cap and Balance solves the immediate debt ceiling problem and gets the budget under control in the short and long term. It’s not only a reasonable compromise; it’s a smart solution. Raising the debt ceiling is a temporary fix, whether it’s raised through the end of the year, through the 2012 election or further, because it only treats a symptom of the real problem: the debt itself. Without a serious, comprehensive approach to budget reform, we face a long-term sovereign debt crisis similar to the one Greece is experiencing.

We’ve simply run out of money, and it’s now time to make hard choices and set priorities. The United States spends roughly $300 billion a month, 43 percent of which is borrowed. That’s not a sustainable spending pattern and isn’t a practice we should endorse by raising the debt ceiling without cutting spending. We need to cut spending and grow the economy.

That’s why tax increases are and should be off the table. As long as there are programs like AmeriCorps and subsidies such as those that prop up ethanol, we can afford cuts without raising taxes. Addressing the debt without raising taxes sends an important message to American businesses, which are hording cash but not hiring in large part because of uncertainty over the future of taxes and regulations, according to a recent report in The Washington Post.

The real refusal to compromise is coming from Democrats, who insist on a debt ceiling increase that will last through the 2012 election, in the hopes that voters will forget about their spending binge until after they’re re-elected. All that accomplishes is kicking the can down the road while debt continues to pile up on our children and grandchildren. As Obama himself said in 2006 when he voted against increasing the debt ceiling, “America has a debt problem and a failure of leadership. Americans deserve better.”

Matt Kibbe is president and CEO of FreedomWorks, a nationwide grassroots organization fighting for lower taxes, less government and freedom and the co-author of Give Us Liberty: A Tea Party Manifesto.

  • Wabbitwinks

    I think there is still a lot of waste. I think Americorps is a good example of it (and I say this as Americorps alumni). Our multiple wars are another waste. I also think that the corporations and wealthy individuals need to be paying their fair share, which they are not by any stretch of the imagination. I, like MOST Americans, want to see the privileged digging in their heels with the rest of us.

    I think the Tea Party is as shallow as its queen. They all work for the Rupert Murdoch’s of the world, whether they do so knowingly or not. I think the bipartisan anger has crippled this nation. I don’t see a solution as long as both sides (this article certainly included) continue to perpetuate that. I don’t know.

    Maybe American Elect will have an impact. If there are more than two sides to choose from, maybe “issues” will take center stage and “personalities” will have to take a back seat. I would love to see the air sucked right out of both the GOP and the DNC. Wouldn’t it be a kick if they had to unite over a common adversary? They’d actually have to start behaving as though we’re all on the same side (what a thought!!!!!) I’m all smiles at the thought of it. :)

  • whoframedrudy

    I don’t care ‘who the adults are.’

    I agree with the Tea Party on spending. I know free markets are better than socialism. But believing in free markets and debt reduction is not the same as an insane ideological fixation that replaces reality.

    Free markets, yes. But a fixated ideological refusal by Alan Greenspan to regulate financial markets in any way led to the Lehman crash, the economic equivalent of a nuclear attack on the U.S. Now it looks to me like fixated ideologues are willing to launch another nuclear strike against the U.S. economy.

    Reality: Right now, the Tea Party only controls a faction in one house of Congress. Dems still have the White House and Senate Majority. Therefore the Tea Party cannot dictate policy — they are still outnumbered. They try to increase their leverage beyond their elected numbers by holding a gun to America’s head (in the form of a national default). That is treason. It deserves the death penalty.

    If voters choose to give conservatives the WH and Senate in 2012, then the Tea Party can set policy. They can make all the spending cuts they want when they have the elected numbers. But right now, using national default as a bargaining chip is treason. It’s economic terrorism. It deserves the death penalty.

    Those Lehman traitors should be locked up on Guantanamo with Sheik Muhammad — they did more harm to this country than Al Qaida. Greenspan should commit sepukku. If America defaults, if China takes over, then We The People will round up the traitors, the insane ideological fanatics, and the economic terrorists inside of our borders. Enough is enough!

  • AViewFromTheCourse

    I sometimes believe that the only real solution is to divide the country in 1/2. Let the progressives even have the pick of the 1/2 they want – North or South, East or West. It matters not. Then they can have a jolly old time implementing all their progressive ideals.

    The constitutional conservatives will take the 1/2 they don’t want. And they’ll live with individual responsibility, maximum freedom, and self-reliance.

    Then we can see whose ideas work out best. Oh, but wait, this experiment has already been done. It’s called East/West Germany.

    • Gridmark

      So, let’s take Texas for example. Take away that you had a president and his influence, money, and jobs coming to that state. Take away the natural resource of oil. And take away the defense industry that benefited from Iraq. And take away the idea of “creation” of jobs is by stealing them from other states with cheaper labor and corporate welfare.

      Now, I don’t know what your idea of progressive, as I believe I am. I don’t believe in welfare, but I do believe in investing in our country, in our people, and in the future. Now, if you are saying that tax cuts and laissez-faire in which we see from the far right is a winner, then heck yeah, as a progressive, I think I can beat you. I would do the Fareed Zakaria and Tom Friedman thing and more. But let us not forget, the states that lost, did not have the advantage of Texas. While there were experts years ago saying we did not need manufacturing and the states with manufacturing lost one third of their manufacturing, Texas benefitted from war. All I can say, is that under Bush I saw our jobs leave the country, our money going to Iraq, tax cuts on borrowed money, a war on borrowed money, and the neglect of the infrastructure. And if the Tea Party today is an indication of what is going on, a one trick pony, then we are in real trouble. Been waiting for years for someone to deal with the problems and they just leave the middle class behind.

      • ShadowDoc

        Texas has oil, so do California, Louisiana, Alaska and several other states. Even North Dakota has oil now, they have a 3.2% unemployment rate last I saw.

        Texas has some defense industry jobs, so do California, Michigan, Georgia, Ohio, Pennsylvania and a host of other states. As a proportion of the population, Texas is not overburdened with defense contractors, much of the aerospace industry is in GA and CA. They’re supposed to build the F-35 in Texas, but that one’s not even out of testing yet. Shipbuilding is Mississippi, Virginia and Maine. Tank and Humvee parts are made everywhere and Texas no longer has an ammo plant, the one that supplies most small arms ammo is in Missouri IIRC.

        If choosing to not tax companies into oblivion is “corporate welfare”, then we have a difference in terms. Texas does have a Business Activity Tax, in case you were wondering, a fairly high sales tax (8-8.25% in most places) and pretty steep property taxes. What Texas doesn’t have is an income tax, which means that the state’s not in your pocket for what you earn. Texas is also not the only right-to-work state, given the opportunity states like South Carolina (BMW) and Alabama (Volkswagen) are other states where foreign manufacturers have chosen to locate. About the only vehicle assembly in TX is a GM plant in Arlington.

        The problem with the government “investing” is that the government doesn’t earn captial to invest with. It takes it from people and organizations with other ideas about where to invest their capital, and often it doesn’t use it very well. I think you may be mistaken from Texas “benefiting” from war, the war is pretty much wound down at this point compared to 2005-2007 and things are still going fairly strong here in part because this is a very good environment in which to do business. California has done poorly in recent years because they have an unpleasant regulatory environment and high taxes, despite being quite a bit more climatically hospitable, having precisely the natural resource and industry advantages you cite and bordering the Pacific, an advantage in international trade. Maybe your reasons for the disparity are not as firm as you believe them to be.

        Yes, we spent about a trillion dollars on wars in Afghanistan and Iraq in the past ten years. Then again, we ran a trillion dollar deficit in under 8 months last year so pointing to 7% of the national debt and saying it’s the whole problem is pretty nonsensical.

        • Gridmark

          Most of the spending under Obama was necessary. I guess you could take away the healthcare bill, if you wish. Otherwise, Obama was handed a total mess after eight years of mismanagement.

          Eisenhower evidently believed in government “investing” as we got the interstate highway, which produced businesses like gas stations, motels, restaurants, tourism, and faster delivery. And that is the way we have to think. I have seen the far right of tax cuts and laissez-faire and it failed and today we are paying the price for it and we pay that price for some 20 years. Today, after years of tax cuts, there is nothing to show for it and people have lost their jobs. Government investment can be done in the infrastructure which is so neglected. It can invest in areas in which the private sector will not risk its money. I have always believed in investing in our country, in our people, and in the future. After decades of not doing that, we can see where we are as a nation while China passes us by as there are those that insist on their ideologies and “staying the course.”

          I find that when some politicians say they “create” jobs, they are only transferring jobs from one state to the other, and that usually means bashing unions and the middle class. In a time of globalization and 2 billion cheap laborers, I don’t see, why we are fighting each other on the state level when we should be more concerned with the rest of the world. But yet you have the David Keatings on C-span that if we trade with the states then we can trade with other countries. Of course, he does not talk about cheap labor or the loss of 57,000 factories over a decade. I have seen all the ideologies of the left-welfare, and the right laissez-faire, and neither makes sense in a time of globalization. And looking where we are at, I would be concerned.

          • ShadowDoc

            The Interstate Highway system was a defense-related investment. I thought those were bad. Okay, name another in the next 50 years. I’ll name some bad investments:

            Synfuel Corporation
            The Department of Energy
            The Department of Education
            Letting FNMA/FMAC run amok
            Farm subsidies
            Ethanol blending subsidy
            All support for alternative fuels
            All support for high-speed rail anywhere it doesn’t pay for itself
            All support for commuter rail anywhere it doesn’t pay for itself (e.g., Detroit)
            All support for “green” energy when it doesn’t pay for itself (e.g., Windmills — and Texas leads the country in MWh generated by wind)
            Bailing out Chrysler
            Bailing out GM
            AmeriCorps
            HeadStart (no measured effect)
            Support for bike paths in the Stimulus
            Rural Internet infrastructure in places where there is already infrastructure
            Antitrust lawsuit against Microsoft
            Antitrust lawsuit against AT&T
            Pretty much every earmark ever written

            That’s off the top of my head. You might add:

            The Iraq War
            The War on Terror
            The Department of Homeland Security
            The Afghan War
            The Libyan Kinetic Action For Peace or whatever they’re calling it today
            Every contract ever written to Halliburton/KBR
            Every contract ever written to Blackwater

            The government may have been able to do big things right in the past. Now it does things that politically-connected people want done, for nebulous reasons. We don’t have an idealized government, we just have the crop of clowns you see on the TV. The government does not create much of anything. It’s not as if we can build another interstate highway system. The bang-for-buck projects are largely complete, or are things the private sector can do if there’s money to be made. Folks will do all kinds of things for a reliable 5% profit margin. Wal-Mart makes do with a 3% margin, and does very well.

          • Gridmark

            But, you leave no answer. We just let China over run us. And I here no answers from any of the candidates. So, we sit in a depression and cannot get out of it. And look at the situation today. The democrats are spending in the wrong areas, the republicans want more tax cuts on top of the Bush tax cuts, the fed is printing money for low interest rates and a low dollar so that we can export more with 1/3 less manufacturing, and the states wants casinos for jobs. And all the while we keep sending jobs overseas and our deficit and debt keep going up and our cities and states suffer. We have lost all our stimulus.

            And the other problem is to avoid a depression, and that means more spending for demand as the private sector is not investing.

            This is the roaring 20′s effect that Bush did. He spent and he stimulated and it is all gone. Obama is not much different, but he was handed a mess. So, to add to your list of how bad government is, add the democrats spending, add the republicans failed tax cuts, add the fed on printing money, and add the states for thinking casinos is the answers. Once again, fix the problem. And we hear nothing. Now we know how FDR felt in combating a depression.

    • It_begins

      Been thinking along those lines for a while now.

      I don’t think it could be done geographically though. Too many families, businesses, etc. crossing lines.

      However, I wonder if, in the internet age, we could do it technologically? That is, I might live under a different set of rules than my neighbor. Sounds hard, but no harder than saying, all you lefties/righties in Texas/California, get the H… out.

  • It_begins

    What most Americans don’t understand is that the Tea Party wins by saying no to everything. What they are after are cuts of over a trillion dollars. Not over 10 years, not “later”, but this year and every year.

    Even a 100 billion dollar cut is trivial when we are borrowing 15 times that much money every year, and the interest alone on our debt is 140 billion a year. Didn’t we all learn that negative amortization (“neg am”) loans were a bad thing 3 years ago?

    The media have done a good job of scaring people about the default, but it’s fake. As long as we pay the 10-15 billion a month in interest payments out of the 200 billion a month in revenue, we are not in default. What it will mean if we aren’t allowed to borrow more money is we will have to stop paying other things. That won’t trigger a downgrade by the ratings agencies, but not paying the interest will.

    If there is no more authority to borrow, the government will have to cut a trillion dollars of spending this year anyway. Obama’s problem is he has a very weak hand, but he doesn’t know it. He’s holding a pair and the Tea Party has a straight flush, which is why he said “You don’t want to call my bluff.” Actually, yes, they do, Mr. President. Either you make drastic cuts of your choice, now, with the cushion of time and debt extension, or those cuts will be forced on you with no cushions whatsoever.

    • Gridmark

      The Tea party is a one trick pony. Nothing said about jobs and we face a depression as we have no jobs, no stimulus, and no demand. Fixing the debt is just one of many problems that we have to deal with. The biggest obstacle we face besides our debt, is globalization. All these years of losing jobs, and they still don’t get it. And as long as we keep shipping jobs overseas, we will not solve one problem here. So, is it possible that anyone can do a dozen things to get our country back on track? And in any case, the Bush “guns and butter” economics alone has put us in dire shape for 20 years.

      • It_begins

        If nothing is passed, the Tea Party wins.
        If the Tea Party gets what they want (sorry for the tautology), they win.

        Call the bluff.

      • ShadowDoc

        Google “Smoot-Hawley”, see how well that worked. Globalization is real, and inevitable, tariffs only end up hurting the country who places them. Bush did that too — tariff on Chinese steel in the early 2000s. Cost about $500,000 in excess cost to industry per steelworker job saved. Globalization is not only real, it’s been happening for over a century. The first wave was the British Empire in the Victorian era. It is a fact of life, maybe if there weren’t laws like Frank-Dodd and Sarbanes-Oxley we’d be able to hold onto some finance jobs, but meanwhile we are effectively moving control of world finance to London. Yet another example of the government “investing” and generating unanticipated consequences.

        • Gridmark

          I wonder what one is suppose to think when Bush came to my state in 2004 and said “free trade is good” and you see the factories close. Now, he borrows for tax cuts so that they can trickle down and they never trickled down. We have a phenomenon going on today that we have not seen in our lifetimes. After the fall of communism, an added 2 billion cheap laborers were added to the free market system and our wages are going down and we are losing jobs, add automation and more loss of jobs, add lean principles and more loss of jobs, and mergers and consolidation and more loss of jobs. So far, I have heard no answers. We got the tax cuts but lost the jobs. Seems like that did not go over well. So now that the middle class got screwed and was neglected while we were told to “stay the course.”

          While democrats come across as dumb, republicans are either nuts or a bunch of hypocrites. And the middle class is losing. You need an upward movement that we lost, we used to have that. We used to invest in our country. As ideology took over and our country neglected we have nothing to show for all that failed ideology.
          http://www.newsweek.com/2009/11/13/is-america-losing-its-mojo.html

          • ShadowDoc

            The word salad you just wrote is interesting in terms of the random items thrown together in semblence of an actual statement. Lets address some of the loose ends:

            1. Free Trade. This is a Clinton-era project. Factories close for a variety of reasons, a lot of them regulatory and environmental. Want clean air and water? Ditch manufacturing, offshore that to China — oops, an unintended consequence. The “fair trade” argument the Dems make is largely to export our burdensome regulation onto other countries and level the playing field in that way.

            2. “Trickle Down”. This is a criticism made *against* tax cuts, not an argument made for tax cuts, the phrase has been in use since the 1920s and always in a perjorative sense against tax cuts. Regardless of that fact, by 2008 we have nearly HALF of households in the United States paying no income taxes whatsoever. Is this really not a progressive enough tax scheme for you? EITC rolls are about as full as they have ever been, that’s part of the “borrowing for tax cuts” you decry. What do you have against poor people?

            3. Loss of jobs. Yes, it happens. The horse carriage industry is not what it used to be, either. The loss of jobs is because of increases in productivity, not a master plan to return us to our agrarian roots. If you want to spend a lot more energy, pollute a lot more, make everything cost more and otherwise return to the bad Old Days, that’s pretty much your choice. I doubt you’ll find a lot of takers. Here’s an idea: there are 12 million people in the country without documentation. Want to make a dent in the unemployment figures? Address that issue. Those are “jobs Americans won’t do”? Guess we’ll find out, won’t we? As far as getting tax cuts and losing jobs — I remember when people were griping that unemployment was way up in the high 5% level in the mid-2000s, and the Congressional Democrats were grousing that the “Real” unemployment number, U6, was closer to 8%. Now that those numbers have doubled and the WH changed hands, we don’t hear a lot from those people about U6.

            4. “Stay the course”. This was used in reference to the war in Iraq, by the Press Secretary, and earlier in the 1980s by George H. W. Bush. This was not used in reference to the economy.

            5. Educational spending increased under the Republican Congress from 2000-2006. In fact, nearly every domestic discretionary budget increased under the GOP from 2000-2006, and increased even more under the Democratic Congress from 2006-2010. If the numbers had actually decreased under the GOP, you might have a point about the lack of “investment” in the country. What we’ve seen is an ideology shared (foolishly) by both parties, to our current chagrin. If there was a difference in the trajectory of domestic government spending then there might be an arguable ideological difference. There isn’t, so there isn’t. Cheer for your team, heck, enjoy it, but the real-world numbers don’t support your statement. One party isn’t a skinflint and the other an open-handed benefactor, both parties spend too much and pretty much on precisely the same things.

          • Gridmark

            1. Yes, the free trade was signed by Clinton and backed by republicans. The experts and economists said we did not need manufacturing and that we would be an information and service society. Still waiting for the jobs. Losing jobs is a big issue and just as big as the debt. You have to cut spending, create jobs, and have revenue. You can sit on an ideology, but that does not solve any problems. Fix the problem and invest in the country. (Newsweek article)

            2. Bush used his tax cuts as a trickle down and it never trickled down. Yes, half the people are not paying taxes, people are out of work and can’t pay taxes, our jobs went overseas. Cities need revenue as well as the states and federal government. So jobs would be an answer, but we closed 1/3 of the factories. So no trickle down can work until you deal with the job issue.

            3. Let me be clear, 2 billion cheap laborers which means lower wages and loss of jobs. God, I have lived it and I see it every day. Why are so many people in this country being ignorant. Add automation, lean principles, and mergers and consolidation and it is more loss of jobs. So, that is why we have to invest in our country. And if you think that is a waste, then the 800 billion+ in Bush tax cuts was a total waste, as we still lost our jobs and the upward movement.

            4. Bush used “stay the course” for two wars and for the economy.
            http://community.seattletimes.nwsource.com/archive/?date=19911119&slug=1318170

            So, Bush stayed the course on the wars and I watched the quagmire for some three years until John Murtha, the Iraq Study Group, and others tried to fix it. Bush used stay the course on his tax cuts and all we got was lost jobs, deficits and debt, our money going to Iraq, and our infrastructure neglected. Now that he has used all the stimulus, we risk being in a depression and it is very difficult to get out of. Now, I can understand the roaring 20′s and then you end up in a depression. The Bush economy was a fake economy, based on a “guns and butter” economics. The last time we had a guns and butter economics was from LBJ and we had over 15 years of inflation. Bush used deficits.

            5. Education has always been a problem. I am more concerned in the area of vocational training as we have less jobs and less job classifications. That is if you want employable people and less welfare.

            While you criticize the government, doing a laissez-faire approach is not an answer either. It only makes people fall further. While I understand the wasteful spending, I saw enough laissez-faire under Bush and we see the economy today because of that. If people ignore our problems, then they are much worse today. You have to deal with the problems. Tax cuts and laissez-faire does not solve problems.

  • Joe Steel

    The author is wrong. We haven’t run out of money. We have plenty of money. All we have to do is go get it.

    How?

    Rollback.

    Personally, I favor a rollback to 1945 federal tax rates. That would put the top marginal rate at 94% for taxable income of $200,000 or more. Adjusted for inflation, that would be $2,900,000+.

    That’s more than generous in my opinion but some are advocating an even more generous tax policy. They want to return to 1960s tax rates. If we did that, they say we could raise $4T in ten years and solve the debt problem without dismantling the government.

    Now that’s real compromise.

    • It_begins

      What is it about liberals that doesn’t allow them to foresee the consequences of their policies? These are frequently referred to as “unanticipated consequences”, but this is incorrect, as they are only unanticipated by liberals.

      You go around taxing people at 96%, and you can darn well bet the wealthiest will no longer be earning their money as “income”, but as options, or some other means of avoiding income tax. For them, it’s just a minor inconvenience easily handled by and accountant and/or attorney – easily affordable by those upon who you seek financial rape.

      It will be the rest of us who suffer, as jobs are destroyed, our taxes go up, and still the government has less revenue to work with.

      This is all beside the point. Even if you taxed 100% of the wealthiest 25%, and they didn’t pull an accounting gimmick, it still would not be enough to cover the deficit. They might have lots of money, but they don’t collectively make 1.5 trillion dollars per year, which is how much you need – just to cover what we are borrowing. The only way to do that would be to outright steal the money they have already paid taxes on. But, something tells me you would be okay with that.

      • Sker68

        The biggest point is that government collected +$2T in tax revenues last year alone and still spent nearly double.

      • Joe Steel

        Mark to market solves the options problem.

        Rollback to 1960 tax rates raises $4T in ten years.

        Case closed.

    • ShadowDoc

      I’d love to roll back to 1999 tax rates — as long as we had a 1999 budget. That’s pretty reasonable, I don’t remember a lot of people-starving-in-the-street stories from the Clinton era, do you?

      Heck, I’d love a 1950s budget. Nine percent of GDP spent on defense, up from 3-4% now. Can the Department of Energy and the Department of Education, those came after the 1950s. That would also solve the Medicare problem, along with a bunch of entitlement financing problems, because all of those Great Society programs of the 1960s would get canned, too. Of course, to get to 1950s-era prosperity you’re also going to have to bomb every other industrialized nation flat and make them retool with our industrial output…kind of like we did from 1942-1945. I wouldn’t recommend it.

      You can set the tax rate to whatever you want. You’re not going to get more than about 20% of GDP in taxes, never have, even when rates were high and the economy was booming. Capital will move itself out of your way, people do change their behavior in response to marginal rates.