Surprise! Debt-ceiling deal gives Obama a blank check: Loophole will allow government to spend WITHOUT LIMIT until February
It’s the ultimate sweetheart deal for a free-spending federal government: Wednesday night’s debt deal didn’t actually raise the limit on America’s credit card, but instead removed it entirely until February 7, 2014.
Whether through legislative sleight-of-hand or something less sinister, the law of the land now permits the U.S. to run up new debts for 16 weeks without consequences, and forbids the Treasury Department from enforcing the debt limit that ordinarily keeps spending from spiraling out of control.
Some observers noted on Wednesday that when Congress burned the midnight oil to debate a deal that would save the U.S. from crashing through its existing $16.7 trillion debt ceiling and risking a credit default, there was no debate over exactly how far to raise it.
House and Senate negotiators only discussed how long the agreement would last.
The Bipartisan Policy Center estimated that if the government had extended its debt ceiling in this fashion through the end of 2014, as one Republican proposal suggested, the federal government’s debt would have ballooned by $1.1 trillion.
At that rate, the national debt will likely grow by at least $282.5 billion on its own by the time Feb. 7 rolls around, bringing the total close to an even $17 trillion.
But there’s no guarantee it won’t grow even faster, especially if the legislative initiatives President Obama outlined Thursday morning were to cross the finish line by year’s end, as he demanded in his first public remarks since signing the debt-limit hike law shortly after midnight.
Obama said he wants Congress to give him a new budget deal, a 5-year farm bill and a comprehensive reform of America’s immigration laws, all before New Year’s Day.
Any one of those three could be a colossal budget-buster. Under ordinary circumstances, a hard-and-fast debt limit might serve as a check against runaway spending; but with no ceiling, Democrats could raid the Treasury to give the president what he wants, without fear of practical roadblocks getting in the way.
Republicans, too, could take advantage of the spending loophole. Senate Minority Leader Mitch McConnell demonstrated on Wednesday that he’s willing to accept expensive pot-sweeteners in exchange for a tidy solution to a messy problem.
When Obama signed the debt-bailout package into law, it included more than $2 billion in new spending for a dam project in McConnell’s home state of Kentucky, answering for some the thorny question of why the Senate’s top Republican would be so eager to make Democrats look good by negotiating a deal when tea party conservatives in the House were refusing to do so.
According to the conservative Heritage Foundation, Obama and Congress have already used the trick of ‘suspending’ the debt ceiling for a fixed period of time once before – running from February to May of this year.
That deal added $300 billion to the national debt in 102 days. The deal that went into effect Thursday covers 114 days.
The only requirement for that earlier agreement was that the Democrat-led Senate produce a formal budget for the first time since President Obama took office, which it did.
‘No savings were accomplished,’ says Heritage.
‘Suspending the debt is less transparent to the American people,’ the group explains, adding that ‘a calendar date is not nearly as scary to constituents as a figure in the trillions of dollars.’
The coming battles over a year-long federal budget, including Democrats’ demands for new taxes and an expected Republican push for spending cuts, could actually reduce deficit spending; but with no credit limit holding them back, lawmakers could see a perfect storm for committing to hundreds of billions in new earmarked projects calculated to please constituents back home.
The farm bill, too, is likely to rack up record spending on programs like food stamps, which fall under the Department of Agriculture’s budget: The Obama administration has already doubled the number of Americans receiving these entitlements since January 2009.
But immigration could require the biggest blank check of all.
While Obama and congressional liberals want to put 11 million illegal aliens on a path to citizenship, conservatives have consistently argued that the nation’s borders must first be secured. That, Democrats have countered, is simply too expensive to contemplate since it would likely involve building thousands of miles of new high-tech fences and staffing the Mexican border with thousands of guards whose salaries no one has contemplated yet.
Capitol Hill sources tell MailOnline that without a fixed debt ceiling over their heads, everyone in Congress might suddenly find it workable to give both parties what they want.
‘I can’t speak for the whole Republican caucus, of course,’ said a policy staffer to a conservative GOP House member, ‘but some of us want a border fence badly enough that we’ll look the other way if it adds a few hundred billion to the national debt.’
‘And once that’s in place, the biggest impediment to a citizenship path disappears.’
Since President Obama took office, new deficit spending has added about $43,000 to the national debt for every household in America.
That reflects a 60 per cent increase in the debt from where it sat on his first Inauguration Day, at $10.3 trillion.
At current rates of growth, Obama will leave office with national debts twice the size of those accumulated by all the previous U.S. presidents combined.
Posted on October 18, 2013, in bail-ins, Cultural Revolution "FORWARD", Economic collapse, Financial repression, Pork, Progressive Agenda, Tax Payer's Dime, United States and tagged Barack Obama, Congress, Loophole., Mitch McConnell, Obama, Senate, United States. Bookmark the permalink. Comments Off on Surprise! Debt-ceiling deal gives Obama a blank check: Loophole will allow government to spend WITHOUT LIMIT until February.