Conservative Leaders to House GOP: No Hike in Debt Limit Without Deal to Balance Budget
(CNSNews.com) – In a memo that will be delivered to House Republican leaders at their annual meeting in Williamsburg, Va., conservative leaders are saying: Don't cut a deal with President Obama to increase the debt limit unless it cuts spending immediately and puts the federal government on a fiscal path that balances the budget within 10 years.
“Today is the day we stop stealing from our children,” says the memo headlined, "Congress Must Pass a 10-Year Pathway to Balance to Raise Debt Limit." (Memo for the Movement.pdf)
“Conservatives should not raise our nation’s statutory debt limit unless Congress passes and the President signs into law real reforms and immediate spending reductions that place America on a path to balance within 10 years without raising taxes and keeping the budget in balance," the memo states.
The debt limit is the amount of money Congress has legally authorized the U.S. Treasury to borrow government. The Treasury is now at the current limit of $16.39 trillion and cannot legally increase the net debt of the government.
The memo from the conservative leaders further says that Congress should pass a bill to give the Treasury Department explicit authority to prioritize federal spending commitments in the event the debt ceiling is breached, averting the possibility of a default.
“President Obama fought for and won a $2.1 trillion increase in our nation’s statutory debt limit,” the memo reads. “Because of massive overspending, America is on an unsustainable fiscal path. Unless immediate action is taken, our future is destined to be that of Greek-style implosion or the slow managed decline of Western Europe. Neither option is acceptable.”
The memo says that balancing the budget within the decade is a “moral obligation” and repeats the long-held conservative position that any balanced budget or debt ceiling deal should include no further increases in tax revenue. (Memo for the Movement.pdf)
Among the signatories on the memo are the heads of some of the largest conservative grassroots organizations, including the Club for Growth, Heritage Action, the conservative blog RedState, and the umbrella group Council for National Policy.
ForAmerica Chairman Brent Bozell also signed onto the memo. He is the president of the Media Research Center, the parent organization of CNSNews.com. Other signers included Tony Perkins, president of the Family Research Council; former Indiana congressman David McIntosh; and former Attorney General Edwin Meese III.
The memo rebuts claims from Democrats and others that breaching the debt ceiling would result in a default, explaining that Treasury can prioritize interest payments to avoid default.
“The United States will not default on its debt and the full faith and credit of America will not be questioned,” the memo says. “Not only does the federal government have the funds necessary to service our debt, the executive branch has a constitutional obligation to do so. After we service the debt we also have the ability to prioritize spending obligations to ensure critical programs are funded first with remaining revenue.”
House and Senate Republican leaders have said that any increase in the nation’s debt limit must be accompanied by spending cuts. Treasury announced on Dec. 31 that the nation had hit the debt ceiling – the legal limit on outstanding federal debt – and would begin using extraordinary measures to give the government needed financial flexibility.
Treasury also said that those measures – including the suspension of some new debt issuance – would be exhausted by the end of February, forcing the government into uncharted territory as it faces the inability to finance the deficits imposed on it by Congress.
Republicans in Congress, particularly Senate Republican leader Mitch McConnell (R-Ky.), have also said that they consider the “revenue” issue, i.e., more taxes, solved after the passage of the fiscal cliff deal earlier this month, declaring that they will not acquiesce to further tax increases.
President Obama and others have warned that not raising the debt limit could hurt the nation’s credit rating and put the full faith and credit of the United States at risk because the Treasury would not be able to make interest payments on the nation’s $16.4 trillion national debt, resulting in a default.
By passing legislation explicitly allowing Treasury to prioritize those interest payments, as well as payments to Social Security, Medicare, and other entitlements, Congress would avoid a default scenario and the legal challenge that might accompany an attempt by Treasury to pay some creditors but not others.
The "Memo for the Movement" was put together by the Conservative Action Project, headed by Meese, and which "is designed to facilitate conservative leaders working together on behalf of common goals. Participants include the CEO's of over 100 organizations representing all major elements of the conservative movement -- economic, social and national security." (Memo for the Movement.pdf)