In April of 2011, S & P lowered expectations on U.S. Government debt from “stable” to “negative.” Astonishing, the $14.2 trillion U.S. debt was still rated as AAA. The shift in expectations did not trigger higher borrowing costs because the market presumed that a political deal lowering the deficit would be facilitated by the warning-call. At the same time, Congress and the U.S. president were grappling with the need to extend the federal debt ceiling. The federal government was projected at the time to reach its borrowing limit by May 16, 2011, though the Treasury secretary, Tim Geithner, said he could use accounting options to push the date back to July 8. He assured the public that Republicans in Congress had told President Obama that they would go along with a higher limit. “I want to make it perfectly clear that Congress will raise the debt ceiling,” the Geithner said. He also said the Republican leaders had assured the president that they “couldn’t play around with the government’s credit rating. They recognize it, and they told the president that.”[1] Such a recognition and statement by the Republican leadership, if true, would evince statesmanship over political expediency, for Republican lawmakers could have leveraged their votes on raising the ceiling to get more in negotiations on the budget. This would be particularly notable considering that appropriations to keep the U.S. Government's non-essential operations going were pawns in a Congressional-presidential power-struggle during the Trump administration.
However, Rep. Paul Ryan, chair of the U.S. House Budget Committee and later to become Speaking of the House, said that while it was true that nobody wanted the U.S. Treasury to default, “(w)e want cuts in spending accompanying a raising of the debt ceiling. And that is what we have been telling the White House.” A spokesperson for Obama said a debt ceiling vote could not be contingent on upcoming negotiations over the budget. So, in effect, the matter of default on the U.S. debt was being used for leverage in negotiations rather than held as untouchable. It is no wonder S & P lowered its expectations concerning the ability of U.S. Government officials to avoid default by failing to raise the federal debt limit. Had the lower expectations been assumed to be a wake-up call for federal lawmakers and the executive, S & P would have been naive.
To say that no one wants default but then to hold it ransom is disingenuous and duplicitous. It is as if to say, “I don’t want to do it but I have to,” when in fact the deed does not have to do it. We see such statements from corporate managers and customer service employees. “Unfortunately, that can’t be done”—weakness that seeks to dominate typically takes assumes the passive voice as if to hide—when in fact the person or especially his boss could. Company policies are in actuality guidelines. Sadly, customers typically enable the false rigidity by taking it at face value rather than questioning it by going above the employee or even manager.
Rep. Ryan could have resisted the temptation to gain greater advantage on the budget by holding the debt ceiling hostage. Even if he made the statement to cover himself with his political base in Janesville, Wisconsin, he bore responsibility for giving the appearance of putting partisan advantage over statesmanship.
Given the encroaching nature of expediency whether for power or profit (or both), even verbal statements can get the ball rolling even for other political parties. Soon the government's duty to act in the public interest becomes a mere byproduct, as if by accident rather than primary intention. Given human nature, political expediency and the desire to make even more money are inherently antithetical to any self-enforced limitation. Hence in government, we can say that statesmanship involves voluntarily giving force to a self-imposed constraint or limitation.
1, “Geithner Confident Congress Will Raise Borrowing Limit,” USA Today, April 18, 2011, p. 6A.
