The president and House speaker restated familiar positions in their dueling debt ceiling speeches, but they took their points too far at times or made them without enough context.
- Obama described raising the debt ceiling as historically “routine.” It is true that every president, with the exception of Truman, has signed such a bill since the 1940s. But this request is the largest in history, even in inflation-adjusted dollars.
- The president also accused Republicans of favoring tax breaks for oil companies and private jet owners at the expense of Medicare beneficiaries. But those populist tax hikes would not reduce the deficit by even 1 percent.
- Boehner claimed Obama is adamantly against “fundamental changes” to entitlement programs. In fact, the president has proposed $650 billion in cuts to the future growth of Medicare, Medicaid and Social Security.
- Similarly, Boehner said Obama “wants a blank check today” just as the president did six months ago. It’s true that six months ago Obama wanted the debt ceiling to be raised without cutting spending. But the president has now offered spending cuts of between $1.5 trillion and $1.7 trillion over 10 years, including the entitlement cuts we just mentioned.
- Boehner touted the “bipartisan support” for the Cut, Cap and Balance Act of 2011. But the bill got only five Democratic votes in the House and no votes in the Senate.
For the most part, the two men stuck to the facts or offered their opinions. In our Analysis, we provide details on where they did stray too far from the facts.
President Barack Obama was the first to speak, delivering a 15-minute speech to the nation on July 25 — just three days after the White House’s debt ceiling negotiations with House Speaker John Boehner collapsed. The president’s speech was quickly followed by a brief response from Boehner. Both blamed the other for failing to negotiate in good faith, as the country draws closer to the Aug. 2 date when the administration says the U.S. will not be able to borrow any more money and will not be able to pay all of its bills.
Debt Ceiling Vote ‘Routine’?
Obama said raising the debt ceiling has been a common occurrence over the last 60 years. That’s true, but this request is the largest in history, even in inflation-adjusted dollars.
Obama, July 25: In the past, raising the debt ceiling was routine. Since the 1950s, Congress has always passed it, and every president has signed it. President Reagan did it 18 times. George W. Bush did it seven times. And we have to do it by next Tuesday, Aug. 2, or else we won’t be able to pay all of our bills.
Obama was mostly correct when he said that raising the debt ceiling was something that every president has done since the 1950s. The debt ceiling increased during every presidency since the 1940s — with the exception of President Harry Truman — according to the Office of Management and Budget’s historical tables on federal debt statutory limits. Truman became president on April 12, 1945, nine days after the debt ceiling was increased from $260 billion to $300 billion. The debt limit wasn’t raised again until 1954, during the Dwight D. Eisenhower administration, when it went from $275 billion to $281 billion. (Truman had reduced the debt limit to $275 billion in 1946.)
He is also correct about President George W. Bush and largely correct about President Ronald Reagan, OMB’s budget tables show. Bush raised the debt limit seven times. Under Reagan, there were 18 debt-ceiling votes — although one of them didn’t raise the limit but rather changed its effective date. Reagan raised the debt by more than $1.8 trillion in his two terms in office, going from about $935 billion to about $2.8 trillion. And Bush raised the debt limit by more than $5.3 trillion, going from about $5.95 trillion to $11.315 trillion.
The White House, according to House Republicans and various news reports, have requested that the debt limit be raised by $2.4 trillion. That figure matches the president’s own FY 2012 budget, which projects that the debt subject to the statutory limit that year would be more than $16.6 trillion, or nearly $2.4 trillion more than the current $14.29 trillion limit. And the administration has backed a recent proposal by Senate Majority Leader Harry Reid that would raise the debt limit by that amount.
There have only been a few occasions when the debt limit was raised at one time by anything close to $2.4 trillion. In August 1978 and April 1979, the debt limit was raised $398 billion and $430 billion, respectively, under President Jimmy Carter. Those are increases of almost $1.4 trillion and $1.3 trillion when adjusted for inflation. In November 1990, during the administration of President George H.W. Bush, the debt was increased by $915 billion. That’s nearly $1.6 trillion in inflation-adjusted figures. And in May 2003, during George W. Bush’s presidency, the debt limit was raised by $984 billion, or roughly $1.2 trillion when adjusted for inflation.
Corporate Jets, Big Oil and Seniors
Obama recycled a well-worn but misleading Democratic talking point when he accused Republicans of favoring tax breaks for oil companies and owners of private jets at the expense of cuts for Medicare recipients:
Obama: Most Americans, regardless of political party, don’t understand how we can ask a senior citizen to pay more for her Medicare before we ask a corporate jet owner or the oil companies to give up tax breaks that other companies don’t get.
It’s true that GOP lawmakers have so far rejected Democratic proposals to raise taxes on anyone, even oil companies and jet owners, while the House-passed Republican budget called for major reductions in the future growth of Medicare spending. But nobody should get the idea that raising taxes only on one unpopular industry and high-flying corporate suits will significantly reduce the deficit.
According to the nonpartisan Joint Committee on Taxation, repealing all the tax preferences for the oil and gas industry, as called for in Obama’s fiscal 2012 budget proposal, would yield just $36 billion over the next decade. And eliminating tax breaks for corporate jets would yield only about $3 billion over the same period, according to sources quoted by Bloomberg News. That’s about four-tenths of 1 percent of the $9.5 trillion in total deficits projected by the nonpartisan Congressional Budget Office over the same 10 years.
So while attacking oil companies and jet-set corporate executives may have political appeal, it doesn’t qualify as serious deficit-cutting. Raising the $1.2 trillion in added revenue that the president reportedly is seeking will require a lot more than that.
‘Fundamental Changes’ to Entitlements?
In his response to the president’s speech, Boehner claimed that Obama was against any “fundamental changes” to Medicare, Medicaid or Social Security.
Boehner, July 25: The president is adamant that we cannot make fundamental changes to our entitlement programs.
But Obama has proposed cuts to entitlement programs, bucking his own party in the process. In a July 22 press conference, Obama said he had put $650 billion in reductions over 10 years on the table:
Obama, July 22: Essentially what we had offered Speaker Boehner was over a trillion dollars in cuts to discretionary spending, both domestic and defense. We then offered an additional $650 billion in cuts to entitlement programs — Medicare, Medicaid, Social Security. We believed that it was possible to shape those in a way that preserved the integrity of the system, made them available for the next generation, and did not affect current beneficiaries in an adverse way.
Whether Obama offered “fundamental” changes is a matter of opinion, but Obama was open to raising the eligibility age for Medicare from 65 to 67, in exchange for Republicans agreeing to raise taxes, according to the Huffington Post, Fox News and an opinion piece for Bloomberg News by Jonathan Alter, who also said Obama had “endorsed … means-testing benefits [which would take a person’s income into account when distributing benefits] and reducing the growth of future Social Security payments” as part of his $650 billion in spending cuts. A White House spokeswoman confirmed to us that those were the specific measures Obama has proposed.
While the president has been open to some level of entitlement changes, many Democrats have not. House Minority Leader Nancy Pelosi has said cuts to entitlement programs shouldn’t be part of any deal on the debt ceiling. And Democratic Rep. Raul Grijalva of Arizona told Fox News: “As long as the entitlement programs are part of a cut program, I can’t support it.”
No Blank Checks
Boehner also accused the president of wanting a “blank check today.” That’s not true.
Boehner: The sad truth is that the president wanted a blank check six months ago, and he wants a blank check today. That is just not going to happen.
It is true that Obama “wanted a blank check six months ago.” In January, Treasury Secretary Timothy Geithner formally asked Congress to raise the debt ceiling in a letter to congressional leaders. He urged quick action, warning that the debt limit could be reached as early as March. But he didn’t promise any specific spending cuts to offset the higher debt ceiling and neither did the White House. The administration at first resisted Republican calls to cut spending in exchange for raising the debt limit. By April, the White House was still seeking to separate the two issues. White House Press Secretary Jay Carney told reporters April 15 that raising the debt ceiling and reducing deficit spending are “both urgent, but they’re not linked.”
However, Boehner takes it too far when he claims that the president wants “a blank check today.” That’s no longer the case. As Carney explained in a July 14 White House press briefing, the administration offered somewhere between $1.5 trillion and $1.7 trillion in cuts in exchange for raising the debt ceiling. By July 21, the New York Times was among many news outlets reporting that Boehner and Obama were close on a $3 trillion package of spending cuts, entitlement changes and new revenues. A day later, the talks broke down when there was a dispute over how much to raise taxes. Obama said he sought $1.2 trillion in new revenues; Boehner said the president demanded $400 billion more than they had originally agreed upon.
Boehner portrayed the House vote for the Cut, Cap and Balance Act of 2011 in a way that could lead some viewers to think it received more Democratic support than it really did.
Boehner: Last week, the House passed such a plan, and with bipartisan support. It’s called the Cut, Cap, and Balance Act.
Boehner is correct that it received bipartisan support — that is, it received Republican and Democratic votes. But it received very few Democratic votes. Only five out of 193 Democrats voted for it. In fact, more Republicans voted against the bill than Democrats voted in favor of it. Nine Republicans voted no — including presidential candidates Michele Bachmann and Ron Paul, both of whom said it did not go far enough. The bill passed 234-190.
Who’s to Blame for ‘Crisis’?
Boehner claimed that the current situation is one that Obama created himself by rejecting GOP proposals to raise the debt ceiling in exchange for spending cuts. But it takes two sides to create an impasse.
Boehner: If the president signs it, the ‘crisis’ atmosphere he has created will simply disappear. The debt limit will be raised. Spending will be cut by more than $1 trillion, and a serious, bipartisan committee of the Congress will begin the hard but necessary work of dealing with the tough challenges our nation faces.
Boehner is right that Obama could make the debt ceiling issue go away, at least temporarily, if he were to sign a new bill that Boehner is working on after the House-passed Cut, Cap and Balance Act failed to clear the Senate last week. That assumes, of course, that Congress sends it to his desk. Boehner’s new plan would increase the debt ceiling by nearly $1 trillion — enough to last through the early part of 2012 — in exchange for cutting the deficit by $1.2 trillion over 10 years, according to news reports. That means it would force another vote on raising the debt ceiling before the 2012 presidential election. Boehner’s plan would also establish a joint congressional committee that would be tasked with coming up with additional spending reductions.
But Republicans could just as easily make the “crisis” disappear by voting in favor of Democratic proposals to raise the debt ceiling. Republicans have demanded deep spending cuts without new revenues in exchange for raising the nation’s debt limit. And when Democrats proposed reducing the deficit through a combination of spending cuts and revenue increases, Republicans rejected the idea of any tax hikes.
So both parties are partly responsible for the current situation.
– by Eugene Kiely, Brooks Jackson, Lori Robertson and D’Angelo Gore
CORRECTION: This story has been updated to CORRECT the debt limit history paragraph to read Jimmy Carter, not Gerald Ford.
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