Bob Franken

Hearst-New York Times Column

(As usual, the agreement with syndicators means this solumn appears here a week after its newspaper release)
^WHOSE FAULT WOULD DEFAULT BE?@< ^(For use by New York Times News Service clients)@< ^By BOB FRANKEN@= ^C.2011 Hearst Newspapers@= WASHINGTON _ The reason an important part of American greatness is teetering on the edge of her financial credibility is because the Tea Party team that the voters sent to Congress last year is keeping its promise. Why would anyone be surprised by this? In district after district, successful Republican candidates pledged they would cut the federal government down to size, no matter what. Disgusted voters, who were amply warned about what ``no matter what''" meant, sent them to Washington. Now, with a sufficient number of lawmakers to block any sort of compromise that other congressional leaders are seeking, this bloc of Tea Party-supported House members is holding fast to the rigid position of no-deal-without-painfully-crippling-cuts and no-way-on-higher-taxes-no-how, even if a financial default will result, even if they block increased borrowing authority, even if that destroys the ``Full Faith and Credit'' that symbolizes the strength of the United States. It will severely weaken the country they profess to love. Then there are the convenient deniers, the Michele Bachmanns of this world who want to make political hay out of the scorched earth. She's out there declaring to the world that she is not going to vote to increase the debt ceiling, because, as she puts it again and again, this is about ``scare tactics'' from President Obama who is unwilling to ``tell the truth.'' That ignores entities like a coalition of influential business groups, which never met a Republican they didn't least until now. The Business Roundtable, the U.S. Chamber of Commerce and the National Association of Manufacturers _ usually the powerful champions of corporate self-interest _ have organized top CEOs to sign a letter to the politicians involved, warning them that "failure to raise the debt ceiling would strike an immediate and serious blow to any economic recovery, and failure to make significant progress on long-term debt reduction will continue the uncertainty which is hampering our investment climate." That sounds positively Obama-like, which is remarkable, but so is the danger. This explains why Senate Republican Leader Mitch McConnell has come up with his Plan B, which would effectively hand over the power to increase borrowing limits to Obama and, as he argued, put the onus on the White House to explain why times are so hard.

McConnell is the guy, remember, who famously said, “The single most important thing we want to achieve is for President Obama to be a one-term president.”
He stuck to that theme this week, explaining to conservative radio host Laura Ingraham that it was important to avoid default, otherwise default would “give the president an opportunity to blame us for the bad economy.”

But the Tea Partiers and those courting their favor will have none of that. In their view, using the debt ceiling as a hostage is the only way to force action on out-of-control spending that threatens to send one and all down the drain.

They do have a point. The nation is crushed by generations of irresponsible spending and gross bureaucratic mismanagement. Their insistence on stopping the future collapse is right on the money, literally. But avoiding destruction in a few years becomes impossible if it occurs now.
The financial ratings services, all of them, have already made it clear that if a deal is not consummated by August 2, they will downgrade U.S. creditworthiness. In that event, the U.S. government would have to pay higher interest rates to get loans. Interest rates then would rise for every business and each one of us, sending the economy on a downward spiral to uncertain depths.

There are still a few days for a “grand bargain” or a not-so-grand one that could that allow the U.S. to continue essential financing while heading down the road to a fiscal solution. The alternative, which is to incur default on August 2, points strictly down the road to ruin.
^–@< (Email: bob(at); on the

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