Wednesday, January 19, 2011

Sen. Pat Toomey Has a Great Idea on How to Freeze the Debt Ceiling Without Risking Default

Sen. Pat Toomey - Those words sound really good! -  has not bought into the "sky is falling" mentality that Obama, Democrats, and others within the Obama administration have been expressing regarding the debt ceiling.  He even points out that it is NOT a necessity to raise the debt ceiling but in fact emphasizes that if the debt ceiling is raised and congress continues their enormous spending spree, business as usual, then the ramifications would be staggering.  Pat Toomey says there is an alternative.

He is introducing legislation "that would require the Treasury to make interest payments on our debt its first priority in the event that the debt ceiling is not raised. This would not only ensure the continued confidence of investors at home and abroad, but would enable us to have an honest debate about the consequences of our eventual decision about the debt ceiling. If we do not raise it, the government's tax revenue will enable us to fund roughly two-thirds of projected expenditures, including interest payments. Without the ability to borrow the other third, spending cuts would be sudden and severe: Projects would be postponed, some vendor payments would be delayed, certain programs would be suspended, and many government employees might be furloughed. Default would easily be avoided, but these cuts would certainly be disruptive. That's why I hope we can avoid this scenario." 

Pat Toomey points out: 

The recent surge in spending, both in absolute dollars and as a percentage of our GDP, has driven us to record deficits and an explosion of debt. The growth in discretionary spending has been the most dramatic, but in the future mandatory entitlement spending will be the deficit driver. Congress must address both in order to put the government back on a sustainable fiscal path.
The vote on whether to raise the debt ceiling—and, if so, by how much—is our best opportunity to insist that any increase in our nation's debt be coupled with concrete steps toward fiscal sanity. Congress should make increasing our debt contingent on immediate cuts in spending and effective reforms of the spending process that helped get us into this mess.
For too many years, Congress has ignored or exacerbated the looming fiscal crisis created by overspending. Last fall's elections were largely a call to finally deal with this imminent threat, and the vote on the debt ceiling is Congress's opportunity to begin making real progress. We can do so without jeopardizing the full faith and credit of our country—and we should.
I agree with Pat Toomey. This out of control spending must stop!  It also sounds like Afghanistan is on the correct path now.  With the coordinated effort of both our troops and Afghanis hopefully this positive trend will continue. 

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