[mikemike]

We have been on the cusp of default a mere 5 years ago.

The adoption of the conference report on the FY2006 budget resolution in late April 2005 also triggered the Gephardt rule (House Rule XXVII), producing a House Joint Resolution (H.J.Res. 47) that also would raise the debt limit by $781 billion to $8.965 trillion. Under the rule, the resolution was automatically deemed passed by the House and sent to the Senate. Through the end of the first session of the 109th Congress, the Senate had not considered H.J.Res. 47, nor had Congress considered a reconciliation bill raising the debt limit as called for in the budget resolution.

At the end of December 2005, Secretary of the Treasury Snow wrote Congress that the debt limit would probably be reached in mid-February 2006, although the Treasury could take actions that maintain the debt below its limit until mid-March. He therefore requested an increase in the debt limit.30 In two more letters, sent on February 19 and March 6, Secretary Snow advised Congress that the Treasury was taking measures within its legal discretion to avoid reaching the limit and that these measures would suffice only until the middle of March 2006. Secretary Snow authorized actions used previously by the Treasury, including declaring a debt issuance suspension period. As March began, the government was again close to becoming unable to meet its obligations. During the week of March 13 the Senate took up H.J.Res. 47. On March 16, the Senate passed a debt limit increase after rejecting several amendments. The President’s signature on March 20, 2006, then raised the debt limit (P.L. 109-182) to $8.965 trillion.

http://fpc.state.gov/documents/organization/105193.pdf

The vote on HJ Res 47 passed the senate without a single democrat supporting it. Democrats who voted against it included Sen Obama, Sen Clinton, Sen Biden, and Sen Reid.

GovTrack: Senate Vote On Passage: H. J. Res. 47 [109th]: Debt Limit Increase resolution
This link shows one democrat, Arlan Spector, voted yes but at the time he was a republican.

At the time, there was no media uproar about the intransigent democrats or the sky falling if this wasn't passed.

Why is this virtually identical scenario getting treated so differently now?

[Nesster]

The White House

Washington

November 16, 1983

Dear Howard:

This letter is to ask for your help and support, and that of your colleagues, in the passage of an increase in the limit on the debt ceiling.

As [Treasury] Secretary [Don] Regan has told you the Treasury’s cash balances have reached a dangerously low point. Henceforth, the Treasury Department cannot guarantee that the Federal Government will have the sufficient cash on any one day to meet all of its mandated expenses, and thus the United States could be forced to default on its obligations for the first time in its history.

The country now possesses the strongest credit in the world. The full consequences of a default — or even the serious prospect of a default — by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets. The Nation can ill afford to allow such a result. The risks, the costs, the disruptions and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns.

I want to thank you for your immediate attention to this urgent problem and for your assistance in passing an extension of the debt ceiling.

Sincerely,

Ronald Reagan

There is this too... I'm looking into the history of this, it is interesting. I suppose part of this is the Democratic position of continued government involvement in social programs + their adherence (at the time) to the 'no unfunded expenditures' agreement reached during Bush I. Whereas, the Republicans yell about cutting government starting with social programs, and the fact that for several years they did not seem to give a damn about debt and defecit. The Dems usually won't get up and shout stuff about shutting down the government... but the Reps do. So in that way it's something they bring on themselves?

But thanks for bringing up this interesting tidbit, this should be a nice bit of digging.

[Nesster]

Ah, my recollection was correct:
Debt Limit to Rise to $8.18 Trillion (washingtonpost.com)

The strict rules that once limited tax cuts and entitlement spending increases lapsed two years ago. Limits on spending lost their teeth. This year, Congress failed to pass a budget altogether.

Last night, with the federal government warning that it was on the verge of defaulting on its debts, the House rejected efforts to reimpose restrictions on tax cuts and spending, then joined the Senate to raise the federal debt limit by $800 billion, to $8.18 trillion.

The collapse of statutory restraints on the growing budget deficit has alarmed Wall Street, befuddled the Treasury Department and elicited calls for a rethinking of the way the government handles its authority to tax its citizens and spend those proceeds.

"The fact is, very little [budgetary restraint] is left in any real form or substance," said Robert D. Reischauer, a former director of the Congressional Budget Office, now president of the Urban Institute.

With last night's passage of the debt ceiling increase, the government's borrowing limit has climbed by $2.23 trillion since President Bush took office: by $450 billion in 2002, by a record $984 billion in 2003 and by $800 billion this year. Just the increase in the debt ceiling over the past three years is nearly 2 1/2 times the entire federal debt accumulated between 1776 and 1980.

A recession, a sluggish economy and five tax cuts in four years -- coupled with soaring defense spending on wars in Iraq and Afghanistan and rising domestic spending -- have turned record surpluses that Bush inherited into a record deficit of $413 billion in the past fiscal year.

Economists and budget hawks fear that rising deficits are contributing to the steadily declining value of the dollar, which will increase consumer costs, and that those deficits eventually will drive up interest rates and slow the economy.

As the national debt continues to mount, Washington is having difficulty keeping up. In August, Treasury Secretary John W. Snow implored Congress to raise the debt limit to ensure that the Treasury could continue to borrow the money it needed to finance government operations and pay benefits such as Social Security. But with an election looming, lawmakers declined to act.

Last month, the government crashed into the debt ceiling, and the Treasury began borrowing from a civil service retirement fund. On Monday, the Treasury announced it had postponed an auction of short-term Treasury bonds because it was prohibited from borrowing the money. Yesterday, amid continuing uncertainty about Congress's intentions, the agency delayed revealing how many government securities it plans to sell next week. Treasury again warned that the government could default on its debt as soon as today if Congress did not act.

The House convened yesterday morning for a short debate on raising the debt ceiling, then promptly recessed to allow members to attend the opening of Bill Clinton's presidential library in Little Rock. Lawmakers reconvened last night to reject a Democratic motion to reimpose "pay as you go" budgetary rules that would force any increase in entitlement spending or cut in taxes to be funded by equal spending cuts or revenue raisers. Lawmakers later raised the debt ceiling.

Much of the drama amounted to "The Perils of Pauline," Reischauer said, with little real doubt that the damsel in distress on the railroad tracks would be rescued just before the train barreled down upon her.

On Wall Street, however, Congress's lackadaisical response raised eyebrows.

"There's generally a denial that the government would allow itself to default, but some of us are getting a little nervous," said David Wyss, chief economist at Standard & Poor's, the bond rating company, as he watched the House recess yesterday morning without a vote.

By passing such a huge increase in the debt limit, with no strings attached, Congress has effectively given the Bush administration a blank check to continue running large deficits, said Stephen S. Roach, chief economist at Morgan Stanley. "An open-ended license for this kind of fiscal irresponsibility is a recipe for disaster," he said.

Republicans and Democrats in Congress agree that the budget process is badly broken.

Sen. Judd Gregg (R-N.H.), who will chair the Budget Committee next year, said the measure of his success will be "putting in place a very definitive budget with strong enforcement mechanisms on the discretionary and entitlement [spending] side."

Beyond such vows, there is little consensus about what to do, said G. William Hoagland, the top budget aide to Senate Majority Leader Bill Frist (R-Tenn.). The deterioration of tough budgeting has been a slow and steady process. In the 1980s, the size of the annual budget deficit was limited, with rules to force automatic cuts if that ceiling was breached. In the 1990s, similar enforcement mechanisms tried to keep Congress from exceeding annual spending limits and from cutting taxes in such a way that increased the budget deficit. Those rules have now lapsed.

Hoagland said some effort will be made next year to strengthen the authority of the budget committees, possibly by bolstering their membership with party leaders and other committee chairmen. The committees could also be granted the power to usurp other committees' authority if they are not complying with the annual budget blueprint.

But congressional leaders thus far have shown little appetite to rein in deficits through such authority. This year, under White House pressure, House and Senate Republicans simply opted against adopting a 2005 blueprint for tax and spending policy, rather than accede to the wishes of Senate Republican moderates to reimpose pay-as-you-go rules.

In other words, the blame, while it cut across parties, seems largely with the tax cut 'n' spend what you don't have Republicans. The Republican congress allowed the prior fiscal restraint rules to lapse, something moderate Republicans (remember those?) and Democrats did not wish to happen. In other words, the fiscally conservative Democrats were trying to rein in that free spending Bush administration

[shooz]

There's this one too.


"The money to run the Government comes from taxes ... If the national income
continues to decline, then the Government cannot run without going into the
red. The only way to keep the Government out of the red is to keep the
people out of the red. And so we had to balance the budget of the
American people before we could balance the budget of the
national Government ... To balance our budget ... would
have been a crime against the American people ... We
accepted the final responsibility of Government, after
all else had failed, to spend money when no one else
had money left to spend." – Franklin D. Roosevelt

[deadwolfbones]

Yeah, it's lovely how so many of the congressmen who had no trouble raising the debt ceiling multiple times under Bush now have "severe ethical qualms" about it.

[mikemike]

Yeah, it's lovely how so many of the congressmen who had no trouble raising the debt ceiling multiple times under Bush now have "severe ethical qualms" about it.

Yes, some of them are leftover neocons like Cantor. But now we are dealing with the 90 tea bagger freshmen who weren't around washington during the bush years.

[Nesster]

*sigh* so how about the 2006 vote?
Sadly, Vote to Increase Debt Limit Saw No Real Debate | OMB Watch

Yesterday the Senate voted 52-48 to increase the statutory debt limit once again. The limit now sits at $9 trillion. The vote to increase the debt limit was necessary in order to avoid a government default, yet Senate Republican leaders pushed hard for this vote to take place without proper debate and without giving Senators a chance to offer amendments, some of which could potentially help to slow the rapid run-up of debt in years to come.

This increase marks the fourth time Congress has needed to increase the debt limit in the five years since President Bush took office, ushering in a debt that has ballooned by more than 51 percent over that time. The vote highlights the abysmal record for both the President and Congress. At the start of the Bush administration--when the national debt was $5.95 trillion and large surpluses were projected for the government--Bush told Congress and America we could afford tremendous tax cuts, while paying down the debt. This turned out to be an utter miscalculation, and the days of surpluses are now long gone. Instead of pursuing the endeavors and investments that would have been possible for the country pre-tax cuts, we are confronted with mountains of debt. At the same time, Congress seems more concerned with managing the political fallout of raising the debt ceiling again than with actually debating how to fix the problem.

The need to increase the debt limit yet again is a direct result of the fiscal policies and practices implemented by Bush and Congress over the past five years. While the administration blames the increase in U.S. debt on both the 2001 recession and the costs of the war on terrorism, in reality the cost of his 2001 and 2003 tax cuts, ringing in at $225 billion in 2005 alone, carry far more of the blame for the burgeoning rise in national debt.

Democrats demanded as much as eight hours of debate and up to three separate amendments to the debt limit legislation, but Senate GOP leaders preferred to try to ignore the problem and avoid a much-needed public discussion on the causes and solutions to our current and growing debt troubles. In the end only one amendment was considered which sought a Treasury Department study on foreign investment in the United States.

Frist blocked Democrat attempts to offer another amendment on pay-as-you-go rules (PAYGO) that would have been an excellent first step toward stemming the irresponsible fiscal policy of this Congress and president. Democrats have offered the PAYGO amendment on several recent occasions, twice last fall and once this week. All three times it has been rejected by razor thin margins, with all but a handful of Republicans voting against it, leading many to question if the GOP has abandoned its fiscally conservative roots. Clearly, far too many Republican Senators felt fine burdening future generations with hundreds of billions of dollars of new debt every year, dampening future economic prospects, and threatening economic security, for the nation.

Unfortunately, Republican leaders were not willing to take even the smallest step to redirect the nation's course toward sound and sustainable fiscal policy. And while the GOP is turning a blind eye, they continue plodding through their work, seemingly oblivious to the results of their actions. Nothing illustrates this more plainly than the yesterday's adoption in the Senate of the FY 2007 budget resolution that will add an additional $684 billion to the government's debt next year.

If lawmakers continue to enact budget and tax legislation in the same irresponsible fashion that has marked the last five years, the debt will continue to explode. Even without factoring in the cost of the Iraq war and annual fixes to the Alternative Minimum Tax, the total national debt under current policy is expected to reach $11.5 trillion at the end of 2011, or twice that of the debt inherited by Bush when he took office.

Allowing this level of debt is both unfair and irresponsible. Every single U.S. citizen now carries $28,000 of national debt burden, and this number will dramatically increase unless Congress makes some real changes to current fiscal policies. At a minimum, Senators and Representatives should be having real conversations and debate about what is wrong with current budget and tax policies and how to fix them.

Sadly, the projection of $11.5 trillion in debt in 2011 was reached a year early.

[jeffkrol]

You would think "adults" wouldn't need fake debt ceilings, wouldn't you.........