Saturday, July 16, 2011

Obama Voted Against Raising the Debt Ceiling in 2006

Washington DC Jul 16, 2011. President Obama’s economic advisor Austin Goolsbee said last week that a refusal by the Senate to increase the government’s debt ceiling (currently $14.3 trillion) would be “catastrophic” and a sign of “insanity.”

And that isn't the position the president has held in the past. When President Obama was in the Senate, he thought raising the debt ceiling was a bad idea.

Here are Obama’s thoughts on the debt limit in 2006:
"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."

In 2007 and in 2008, when the Senate voted to increase the limit by $850 billion and $800 billion respectively, Obama did not bother to vote. (He did vote for TARP, which increased the debt limit by $700 billion.)

President Obama was right when he said that in 2006. Borrowing more money to pay your routine bills is a sure sign you are spending too much.  The President voted against raising the debt ceiling when GW Bush was President, but now that he holds that job he has had second thoughts.

 White House Press Secretary Jay Carney said the president now views that vote as a "mistake."

"He now believes it was a mistake," Carney said. He said Obama understands that senators want to make it clear when they disagree with the administration but that there are other ways to go about doing it.

He said the debt ceiling vote is not something Washington "can play around with," warning that a failure to lift the cap would be "Armageddon-like" for the economy.


  1. Changing positions over a 5 year period does not necessarily surprise me for any leader on most issues. Times changes, and so do circumstances. Additionally, he is in a different position. If one held to a particular philosophical debate at all times and under all circumstances, I would begin to become concerned.

    During the last Presidential election, CSpan2 Book TV aired a program where the author discussed the results of his or her research, which suggested that something like 5-10% of Democrats , and 5-10% of Republicans, essentially debated and defined the ideological constructs of each party. The point was that the vast, vast, vast majority of the citizens of this country have their lives dictated by the most active and vocal members of society, who also happen to be more privileged .

    I strongly suspect that the same thing is occurring with the debt ceiling debate. The debate is not really about the debt ceiling per se, but rather a very deep, long-standing debate about the role and size of government. It’s never been resolved, and never will be resolved in our representative democracy. However, in the mean time, the regular folks in our society run the risk of being irreparably damaged. The elites (the upper and upper middle socio-economic classes) on each side of the fence have theirs, their corporate contributions, decent jobs and income, and will fare just fine economically. It’s the ordinary citizens (lower middle socio-economic class) who will most likely get screwed, no matter which side ultimately prevails in the short term.

  2. You make some very good points.

    However, I see Obama's complete reversal on the debt ceiling issue as purely political. He felt it was "a sign of leadership failure" when Bush was President, but now he feels it's necessary since he is President. Just like so many other issues he has conveniently flipped on ("a tax cut for 95% of you, bring the troops home on day one, close down Camp X-Ray, repeal the Patriot Act, ban warrant-less wiretapping, etc."

    The truth is BOTH parties have learned how to use the national treasury to buy votes, and as long as the voters want more free stuff, we will plunge deeper and deeper into debt.

    The GOP opposition to raising the debt ceiling is equally political. First, since they are out of power they must oppose the president, and second the Tea Party Movement is holding their feet to the fire. And this is a force to be reckoned with under these dire economic conditions.

  3. This is essentially a no win situation for the American People. As long as a majority of us wants free benefits for illegal aliens, free healthcare for everyone, low cost student loans, the continuation of Social Security and Medicare, and the continuing expansion of our military role abroad, then the economics just won't sustain it.

    For some reason, the Democrats think an austerity program is "good for Greece" but "bad for the USA."

    Exactly who will bail us out?

    Not with a 10% unemployment rate (that the President calls "the new normal") and not with more and more jobs going overseas.

    The math just won't work. Eventually, China will stop loaning us money and the house of cards must collapse.

    Perpetual borrowing to pay routine expenses is NOT a sustainable strategy. It is foolish and pretty much guarantees national failure.