For years, legislation to raise the federal debt limit offered plenty of political theater on Capitol Hill, with the party out of power using it to rail against the party in power. As a senator, US President Barack Obama said in 2006 that a bill to raise the debt limit was “a sign of leadership failure.”
This time is different, and not only because the parties have switched roles. Now, conservative House of Representatives Republicans have a virtual veto over a measure to increase the debt ceiling and some freshmen in both chambers say they worry more about changing the ways of Washington than about getting re-elected.
“Re-election is the farthest thing from my mind,” Republican Representative Tom Reed said. “Like many of my colleagues in the freshman class, I came down here to get our fiscal house in order and take care of the threat to national security that we see in the federal debt. We came here not to have long careers. We came here to do something. We don’t care about re-election.”
It is not clear how genuine or widespread that sentiment is in Congress, but regardless, it has upended what Obama said on Friday had been a “difficult, but routine process” in past years.
The sheer size of the debt and its rapid growth in recent years have emboldened fiscal conservatives in the House, prompting some of them to pledge not to vote for a higher debt ceiling even if a compromise can be reached before Aug. 2, when the US Department of Treasury says it will hit the US$14.3 trillion debt cap and run out of borrowing authority.
Since Obama took office in January 2009, near the end of a long recession, the total federal debt — including debt held by the public and by government trust funds — has increased 35 percent. While debt exploded, the economy was stagnant, so debt as a share of GDP has also increased.
The current battle over deficits and debt could become the norm if Republicans hold onto their seats or make gains in Congress. The federal debt represents the accumulated total of past borrowing. So even if the government slashes the annual budget deficit, it generally cannot reduce the debt unless it runs a surplus.
Republican Senator Lindsey Graham said many freshman Republicans — “to their undying credit” — were not concerned with re-election.
“The people who got elected in 2010 are going to go down fighting,” said Graham, who served eight years in the House before winning a Senate seat in 2002. “They are not going to be persuaded by traditional politics. They could care less about [elections in] 2012. They want to do what they can on their watch.”
With the Aug. 2 deadline looming, Obama says a default would have calamitous consequences, jeopardizing the timely payment of Social Security benefits and driving up interest rates for the government and private borrowers alike.
Some Republicans say they do not worry much about being punished by their constituents for playing hardball with their votes on the debt limit and thus pushing the nation to the brink of default. And besides, they doubt that the consequences of a default would be as dire as Obama and many economists say.
Republican Representative Jeff Landry said: “I don’t believe, if we fail to raise the debt ceiling, that we will default.”
Even if the debt ceiling is reached, Landry said, the government has more than enough revenue coming in each month to pay principal and interest on the debt.
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