Compromise

After spending many weeks of debate and intensive personal negotiations, a compromise was made to raise the debt ceiling and end our current debt crisis. The drama of the past few weeks put the economy of our nation at risk and concerned Americans and people worldwide.

Compromise has been defined as a settlement between two individuals or groups where each side agrees to give up part of what he/she demands. The compromise about the debt ceiling has left both sides unsatisfied, and the fight over fiscal responsibility will continue. The more I study the situation, the more I realize that the current bill does not do much at all in solving our fiscal crisis.

Americans are disappointed because the debate over the debt limit was more about what was good for politicians than about what was good for the nation. Americans are disappointed because we are saddled with a broken government that refuses to fix itself. Americans are disappointed because the Budget Control Act does not solve the fiscal problems of America.

In a letter to conservatives, Edwin J. Feulner, President of The Heritage Foundation, outlined several elements of the current bill that he considers to be unacceptable:

1) There is no reassurance that this plan will "protect our nation's AAA credit rating." A statement from Moody's last Friday said that "neither the Boehner nor Reid proposals would restore our solid credit footing. This plan did not improve upon those. Economists from Barclays Capital in London said of the deal: `Overall, our first impression is that the agreement by itself is unlikely to be sufficient to cause S&P to remove the U.S. from being on ratings watch for possible downgrade.'" There is still a possibility that a downgrade will take place.

2) Our national security will be put at risk. "If all [defense cuts] are imposed, we will have a trillion dollars less than we need to protect our nation and defend its interests."

3) There will be more tax hikes. President Obama reassured his liberal base that more tax hikes will come from the special committee.

4) Conservatives believe that "Congress should balance its budget year-in and year-out," and they missed a good "opportunity to drive spending down toward a balanced budget." This debt compromise "does little to advance the cause of a balanced budget amendment to the Constitution. Not all balanced budget amendments are created equal. We need an amendment with proper taxpayer protections so that Congress can't simply hike taxes to balance the budget."

5) Americans want their representatives to stop ducking responsibility and "make the tough choices to reform entitlements. The special committee of half-Democrats and half-Republicans will probably not do much to solve the situation.

These elements of the debt plan are not the only problems with it. "Conservatives put up a good fight for the non-defense spending cuts needed to reduce the size and cost of government. While Senate Democrats sat on their hands for 800-plus days, doing nothing, House conservatives introduced and passed the Ryan budget plan and the Cut, Cap, and Balance Act, each of which was a step in the right direction."

Even though conservatives are disappointed with the debt deal, they can feel good about what they accomplished. The biggest change made was "progress we made changing the dialogue in Washington. Just as with the Ryan budget plan, we are talking in terms of spending cuts for a smaller, less costly government, not spending increases. Popular opinion is with the conservative philosophy of limited government."

Although conservatives made progress, we have to realize and admit that "this debt increase was the highest in history. This is not surprising, given the record spending increases and deficits we've witnessed over the past two years." Any sane person realizes that our nation cannot continue to spend more than we take in. If we stay on the same course, we will not be able to stay creditworthy, create jobs or grow our economy.

Feulner stated that we must continue to pursue entitlement reform and revenue-neutral tax reform while at the same time maintaining a strong military in order to defend America. In order to do all these things, Washington must "get serious about spending and regulation.
The Heritage Foundation did what Congress should have done but failed to do when they published a plan called "Saving the American Dream: The heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity." [savingthedream.org/?...] It covers tax reform, health care and Medicaid, Medicare, Social Security, and government spending, and it tells how it will affect millennials, families, low-income workers, entrepreneurs, baby boomers, and retirees. This plan is said to be able to "fix the debt, cut spending, and restore prosperity."

As conservatives we can feel good about the "ground we have gained," but we must not stop fighting for the fiscal salvation of our nation. We apparently had to make a compromise at this point, but the battle will go on.

Borrow Money

The topic of discussion for this Constitution Monday comes from Article I.8.2: "Congress shall have Power to … borrow Money on the credit of the United States." This principle simply tells us that Congress has the power and authority to borrow money and create a debt against the credit of the United States.

Thomas Jefferson obviously did not like this clause in the Constitution because he stated, "I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article taking from the federal government the power of borrowing."

According to W. Cleon Skousen, Jefferson also believed the following about debt: 1) freedom from debt is a key to human happiness, 2) public debt should not be passed from one generation to another, 3) a government should cherish its credit, 4) to saddle posterity with our debts is immoral, 5) public debt is not a public blessing, 6) public debt is a danger, 7) discharge of public debt is vital to a government's survival, and 8) public debt results in oppressive taxation. (See The Making of America: The Substance and Meaning of the Constitution, pp 392-395.)

I agree with Jefferson and Skousen: debt is not a blessing to us or our posterity and any debtor is in a dangerous position. It is good to be able to borrow money to handle an emergency; it is also good to keep the amount of debt at the lowest possible amount and to repay debt as quickly as possible. I believe that our nation is insane to borrow money from our enemies; I do not see any reason to give our enemies any power over us. Yet, our nation is deeply in debt to China. Why?

Taxes

The topic of discussion for this Constitution Monday comes from Article I.8.1: "The people of the states hereby delegate to the federal Congress the power to collect taxes, duties, imposts, and excises."

This provision gave Congress the power to collect general taxes for the first time from either the states or the people. It also gave Congress the power to collect duties on imports, exports, or manufactured items, imposts or a tax similar to duties, and an excise tax or federal sales tax. Taxes consist of both indirect and direct taxes: "direct taxes are levied directly against individuals and their personal property and cannot be passed on to anyone else" while indirect taxes "are much less painful to collect" because they "can be passed on to the person who is the final purchaser of the goods." (See W. Cleon Skousen, The Making of America - The Substance and Meaning of the Constitution, p 372.)

According to Skousen, the Founders expected that the federal government would be able to operate during ordinary times on the import duties, but they also realized that war or other emergency would require direct taxes from the people and their property. Thomas Jefferson and Andrew Jackson were the two Presidents who were most successful in handling the power to tax. Jefferson was able to operate the federal government on the import revenue. He repealed excise taxes, abolished the internal revenue system, and sold public lands. Jefferson was able to pay off half the enormous debt from the Revolutionary War during his eight years in office. Andrew Jackson sold public lands in order to pay off the total national debt and have a surplus. He "returned $28 million to the states."

This information is especially interesting at this time because the conservatives in the House of Representatives are currently in a budget battle with the liberals/progressives in the Senate and White House about cutting spending and lessening debt. Wouldn't it be nice if we could find another Thomas Jefferson or Andrew Jackson in our day?