Trying to gain the upper hand in a debt-limit showdown with Congress, President Barack Obama told a group of corporate CEOs that “raising the debt ceiling … does not increase our debt.” He also castigated congressional Republicans for trying to “extort a president” into defunding ObamaCare, claiming that such an effort has “never [been] seen in the history of the United States.”
In a September 18 speech to the Business Roundtable, Obama said:
Now, this debt ceiling — I just want to remind people in case you haven’t been keeping up — raising the debt ceiling, which has been done over a hundred times, does not increase our debt; it does not somehow promote profligacy. All it does is it says you got to pay the bills that you’ve already racked up, Congress. It’s a basic function of making sure that the full faith and credit of the United States is preserved.
That a president seeking to plunge the nation further into debt would make such statements is to be expected. The remarkable thing is that the room did not erupt in guffaws in response. After all, the whole point of raising the debt ceiling is to permit the federal government to borrow more money, i.e., to take on more debt. And by making it possible for the government to spend even more money that it does not have, raising the debt ceiling most certainly “promote[s] profligacy.” If it did not, spendthrift politicians such as Obama wouldn’t constantly be stumping for higher and higher debt limits.
In fact, Obama’s aside about how often the debt limit has been increased actually puts the lie to his assertion that doing so does not invite more red ink. As Investor’s Business Daily observed, “Suffice it to say that if the debt ceiling has been raised ‘over a hundred times’ and each time the debt went higher, one would have to conclude there’s a very high — indeed, perfect — correlation between a higher debt ceiling and higher debt.”
Obama and his defenders claim that increasing the debt ceiling does not increase the debt because, as Obama’s Treasury Department argued in a 2011 paper, “the debt limit does not authorize new spending commitments. It simply allows the government to finance existing legal obligations that Congresses and presidents of both parties have made in the past.”
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