Obama, Jefferson, Jackson and The Debt
Posted on October 27, 2015
(Originally published on The Hill)
It was slightly less than eight years ago when Barack Obama made a name of himself at the annual Jefferson-Jackson dinner in Iowa.
Back then, the Illinois senator agreed with Thomas Jefferson and Andrew Jackson on one key policy item: the evils of the debt.
Jefferson famously went to war with Alexander Hamilton over the idea of debt. Hamilton thought that taking on more debt was the sign of a healthy and powerful federal government. Jefferson, who was frequently in hock to various creditors throughout his life, hated the very idea.
Jackson shared Jefferson’s dislike of debt. He closed down the Second Bank of America and was the last American president to pay off our national debt in its entirety (a deep depression shortly followed).
President Obama said 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. ... I therefore intend to oppose the effort to increase America’s debt limit.”
Times change, of course.
The Democratic Party is turning its back on both Jefferson and Jackson. Many of the state parties, including Connecticut, have sought to distance themselves from the two founders of the Democratic Party. And Obama is now relying almost solely on Democrats to pass an extension of the debt limit that he once scorned as a failure of leadership.
Unfortunately for Obama, there aren’t enough of his fellow party members in either the House or the Senate to pass a clean debt limit, because the Democrats don’t control either body.
Over the weekend, 2016 hopefuls Bernie Sanders, Hillary Clinton and Martin O’Malley all traveled to Iowa to audition for the assembled Democrats at the annual Jefferson-Jackson gathering. Iowa hasn’t quite caught up to Connecticut when it comes to rewriting history — extending the debt limit wasn’t something that any of these candidates wanted to talk about.
Sanders wanted to talk about Clinton. Clinton wanted to talk about the Republicans. O’Malley wanted to talk about O’Malley and maybe play a little guitar.
Any debt-limit discussion is a buzz kill.
Nobody wants to vote to extend it, but nobody wants to face the consequences if America goes the way of Argentina and suddenly becomes incapable of paying its debts.
Dick Gephardt, who won the Iowa caucuses in 1988 and was intimately familiar with Jefferson-Jackson speeches in his long career, is famous in congressional history for creating a clever way to mask an extension of the debt limit.
Created in 1979, the Gephardt Rule mandated that as the House of Representatives passed its budget resolution, it also automatically increased the debt limit. It was assumed that the Senate, where only a third of the body is up for reelection in every Congress, would pick up whatever the House passed and pass it itself. It was a responsibility of governance.
When Republicans took control of the Congress again in 2010, they turned their back on the Gephardt Rule. They believed that it was irresponsible to hide the debt limit in a budget resolution. The American taxpayers should know how their representatives voted to put more debt on the backs of future generations, they said — at least, that was the theory.
But unfortunately for the GOP, extending the debt limit is not optional. If Congress chooses not to pay its debts, we don’t know exactly what the long-term impact will be. But we do know that the stock market will crash, that the faltering economy will tip back into a recession and that jobs will be lost.
So the challenge for Speaker John Boehner and his leadership team in the House is to come up with the 30 or so Republicans who will vote with the party of Thomas Jefferson and Andrew Jackson to do what nobody really wants to do. Extending the debt limit isn’t good politics, but not extending it is terrible policy.