The latest posting today of the National Debt shows it has topped $14 trillion for the first time.
The U.S. Treasury website today reported that as of last Friday, the last day of 2010, the National Debt stood at $14,025,215,218,708.52.
It took just 7 months for the National Debt to increase from $13 trillion on June 1, 2010 to $14 trillion on Dec. 31. It also means the debt is fast approaching the statutory ceiling $14.294 trillion set by Congress and signed into law by President Obama last February.
The federal government would have to stop borrowing and might even default on its obligations if Congress fails to increase the Debt Ceiling before the limit is reached.
Some Republicans in the new Congress have said they'll seek to block an increase in the Debt Ceiling unless a plan is in place to significantly reduce federal spending and unfunded government liabilities on entitlement programs such as Social Security and Medicare.
NRO's Daniel Foster thinks Congressional Republicans will cave on the debt ceiling (no pun intended), but they'll get a boatload of concessions in return:
Unlikely as it may seem at the moment, I’m becoming more and more convinced that congressional Republicans can get a lot — in terms of spending cuts, entitlement reforms, and the like — in exchange for agreeing to raise the federal debt ceiling at some point in the next few months.
My argument is dead simple.
P1) The debt ceiling won’t be raised without a ‘yea’ vote from Sen. Lindsey Graham (R., S.C.)
P2) Senator Graham said on Meet the Press that
“I will not vote for the debt ceiling increase until I see a plan in place that will deal with our long-term debt obligations, starting with Social Security, a real bipartisan effort to make sure that Social Security stays solvent, adjusting the age, looking at means tests for benefits. On the spending side, I’m not going to vote for debt ceiling increase unless we go back to 2008 spending levels, cutting discretionary spending.”
P3) The debt ceiling must be raised.
Foster expounds upon his theory here, and I find it fairly plausible. One nagging question, though: If both sides tacitly admit the debt ceiling needs to be raised to stave off a crippling federal default, will Senate Democrats (or the White House for that matter) be in a giving mood? If Congressional Republicans hold out for extraordinary concessions, might Democrats simply call that bluff? And does anyone truly believe Republicans would follow through? And could the political stakes be much higher?
As several conservative writers have pointed out in the last few days, Senator Obama opposed raising the debt ceiling in 2006 and explained his vote this way:
"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”
It's certainly a golden quote that may provide fiscal hawks with some leverage as the debate unfolds, but it doesn't really offer much in the way of solutions. As Jim Geraghty often says, all Barack Obama promises and positions come with expiration dates, and this one -- especially this one -- will be no different.
UPDATE: Obama quote corrected above.