House Republicans have a laundry list of things they'd like to negotiate with the White House in exchange for increasing the $16.699 trillion debt ceiling. Delay Obamacare. Build the Keystone XL pipeline. Institute broad-based tax reform.
But what are the chances of any of that happening with President Obama’s ongoing threat to default on the debt out there?
The federal government collects an average $250 billion a month in tax revenue. But it only owes about $35 billion a month in interest on the national debt.
If the debt ceiling was really reached, there would be more than enough revenue to pay interest owed, and existing debt could be refinanced up to the statutory limit.
In short, there would be no reason at all to default — even if the borrowing limit was reached.
But that's not stopping Obama. He is out there threatening to default every single day, claiming he lacks statutory authority to prioritize payments owed to the Social Security and Medicare trust funds, and our nation's creditors, in the event the U.S. Treasury hits the debt limit.
A recent Treasury Inspector General’s report on the Aug. 2011 debt ceiling debacle notes that “while Congress enacted these expenditures, it did not prioritize them, nor did it direct the president or the Treasury to pay some expenses and not pay others.”
So, what to do? Even if Obama and Treasury Secretary Jack Lew really do have the authority, as a then-Government Accounting Office (GAO) report from 1985 found when the same question came up during the Reagan administration -- “The Secretary of the Treasury does have the authority to choose the order in which to pay obligations of the United States” -- it is not enough to force them to act on it.
Therefore, the House of Representatives needs to take Obama’s loaded gun off the table. House Republicans have the “Full Faith and Credit Act,” legislation that guarantees debt service payments will always be made. Obama has promised to veto it.
They should attach it to, say, a $1 trillion increase of the debt ceiling and make that their sole demand. It would guarantee no future president ever again has the ability to threaten default to prevent the Congress from exercising its constitutional power over the purse.
And then House leadership could hit the airwaves talking about how, for example, “our bill will guarantee for all time there is not this cloud hanging over Washington every time the debt ceiling comes due. It’s time for the president to talk to Congress about where we go from here, not threaten to take our economy off a cliff if we can’t reach an agreement.”
James Madison once wrote that the congressional “power over the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance.”
But House Republicans are unlikely to wield it with much effect if the prospect of default — and a global economic crisis — looms over any negotiations.
The only way to change the debt ceiling debate is for the House to use it to talk about Obama’s threat to default and push for the Full Faith and Credit Act.
Then, let it be Obama and the Senate blocking legislation that would avert default. Let Democrats explain why they want to keep their loaded gun at arm’s length.Robert Romano is the senior editor of Americans for Limited Government.