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Raising the Debt Ceiling: Smart Move or Surrender?

Boehner, McCarthy, and Cantor
The establishment news media has been gushing over the fact that House Republicans, apparently at the urging of House Budget Committee Chairman Paul Ryan, have offered President Obama a six week increase in the debt ceiling in order to buy time to negotiate an agreement on the budget and spending.

As The Wall Street Journal has regularly reported, pressure to resolve the debt ceiling has grown, in part due to increased nervousness in the financial markets and among businesses. 

Wall Street rallied on the news that a deal to raise the debt ceiling was even being considered. The Dow Jones Industrial Average climbed 323.09 points, or 2.2%, to 15126.07. Stocks also jumped higher in Asia early this (Friday) morning.

Of course in the face of President Obama’s phony, but persistent, claims that the United States would default on its bonds the relief in the world financial markets was understandable.

The financial markets thrive on predictability, and they have already factored the effects of Obamacare into the price of stocks – witness the fact that many companies subjected to the Obamacare medical device tax have seen their prospects downgraded, even those that laid-off thousands of employees to protect their bottom lines.

So good news on Wall Street is good news for Republicans, who have suffered a drop in the polls over the government “slimdown” over Obamacare, right?

Not necessarily.

A Fox News national poll asked voters to imagine being a lawmaker and having to cast an up-or-down vote on raising the debt ceiling:  37 percent would vote in favor of it, while 58 percent would vote against it.

More importantly for the House GOP, most Republicans polled (78 percent) and a majority of independents (57 percent) would vote against raising the debt limit. So would almost all Tea Partiers (88 percent).  

You can see the details of the Fox News poll through this link.

Fox reported that even Democrats, by a 48-42 percent margin, are more likely to say spending cuts must accompany an increase in the debt limit.

By wide margins Republicans (77 to 11 percent) and independents (65 to 26 percent) would require cuts in government spending before agreeing to raise the debt ceiling.

So is a short term increase in the debt ceiling a smart move on the part of the House GOP, or a surrender?

First of all, Republican nervousness over their poll numbers on the federal government “slimdown” is ridiculous – as Rush Limbaugh pointed out – Obama’s approval is at 37 percent and they think they are losing?

Secondly, and most importantly, whether or not Republicans come out of the debt ceiling negotiations winners or losers depends upon whether they stick to conservative principles and actually obtain serious reductions in the entitlement spending that has ballooned under Obama.

And let’s face it, sticking to conservative principles is not something the Capitol Hill Republican leadership is known for – they’ve caved-in on virtually every other opportunity they’ve had to obtain spending reductions, such as the 2011 debt ceiling fiasco when they torpedoed Cut, Cap and Balance.

Our concern right now is that this short term increase in the debt ceiling is but a prelude to the House GOP, at Paul Ryan’s behest, making another “smoke and mirrors” budget deal that merely kicks the decision on reducing spending down the road. 

Such a deal would boost the stock market, allow the establishment GOP to declare victory without actually having to fight for conservative principles, and thereby dishearten the limited government constitutional conservative grassroots – and even a majority of Democrats and Independents – who want real spending reform.

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