[jeffkrol]

Earlier this month, Treasury Secretary Tim Geithner warned Congress that the U.S. will, in the coming months, reach its legal debt limit unless members vote to raise the debt ceiling. "Never in our history has Congress failed to increase the debt limit when necessary," Geithner wrote. "Failure to increase the limit would be deeply irresponsible. For these reasons, I am requesting that Congress act to increase the limit early this year, well before the threat of default becomes imminent." Geithner's predecessor, Henry Paulson, agreed with the necessity of raising the debt limit long before this political controversy, saying that it is "vital to protect America's creditworthiness, and therefore I'm confident Congress will act to increase the debt limit well before it is reached." The U.S. Congress first imposed a debt ceiling in 1917, and has raised the debt limit 74 times since March 1962, according to the Congressional Research Service, with ten raises occurring after 2001. However, a growing number of Republicans have made it clear that they intend to play chicken with the debt ceiling, risking the credit worthiness of the United States in order to score political points or extract demands from the Obama administration. "The American people will not stand for such an increase unless it is accompanied by meaningful action by the president and Congress to cut spending," said House Speaker John Boehner (R-OH). But by playing games with the debt ceiling, the GOP is inviting a variety of harmful consequences that come with even hints that the U.S. might default on its debt.

HOSTAGE TAKERS: When George W. Bush was President, Republicans regularly voted to raise the debt ceiling with little debate. In fact, during Bush's presidency, the debt limit was raised seven times, including in 2006, when it was raised with the support of 52 Republican senators. Yet, as OpenCongress's Donny Shaw notes, there was a "sudden drop off in Republican support for raising the debt ceiling as soon as Obama took office. A little number-crunching shows that under Bush the Republicans provided, on average, 39 of the 50 votes that were generally needed to raise the debt ceiling. But under Obama, the Republicans have provided only 1 vote on average each of the three times the Senate has voted on it." This is by no means only a Republican phenomenon, of course, as Democrats voted in large blocks against the debt increases of 2003 and 2004, and even 2006. But what is different this time is that Republicans are demanding concessions from the Obama administration in return for what used to be a routine task, and many members have explicitly said that they will not support an increase at all. Sen. Lindsey Graham (R-SC), for instance, said that he won't vote to raise the debt ceiling unless regressive cuts to Social Security are adopted. Sen. Rand Paul (R-KY) wants the U.S. to balance its budget "from here on after" in return for his vote on the debt limit, which would entail 44 percent cuts to every single government program this year. A slew of Republicans from both chambers want to begin the process of implementing a balanced budget amendment to the Constitution in exchange for agreeing to raise the limit. House Budget Committee Chairman Paul Ryan (R-WI), meanwhile, asked for unspecified "fiscal controls." "We do not want to just have some naked debt ceiling increase," Ryan added.

SHAKING FINANCIAL MARKETS: However, the same Republicans who are making demands in return for raising the debt ceiling freely admit that failure to raise it is simply not an option. "Does it have to be raised? Yes, you can't not raise the debt ceiling," Ryan said. Graham added, "Default is the unworkable solution, or the alternative, I guess I'd say -- the unworkable alternative." "Let me tell you what's involved if we don't lift the debt ceiling: financial collapse and calamity throughout the world.

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ECONOMY -- Playing Chicken With U.S. Credit