Tags: debt | downgrade | credit

Rand Paul: Republicans Must Hold Firm on Debt Limit

Friday, 04 Jan 2013 11:15 AM

By Greg McDonald

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Sen. Rand Paul is pushing legislation that would ban revenue from being used for anything but paying interest on the debt, meeting Social Security requirements, and paying military salaries.
 
In an interview Thursday evening with Fox News' Sean Hannity, the Kentucky Republican suggested that would be a better way than threatening a government shutdown to force the president into negotiating significant spending cuts as the deadline nears in February for extending the nation's debt limit.
 
He said it would also be a safer approach, given the uneasiness of the markets and recent reports the government needs to act immediately to bring spending under control to avoid another downgrade of its credit rating.

Alert: End of America's Middle Class a Startling Reality. Read More Here.
  
"There is a way to do it without scaring the markets . . . What we do is we need to pass legislation that says, the tax revenue that comes in will go to pay for the interest on the debt, pay for Social Security, pay for the soldiers' salaries, but it won't fund all of government," Paul said.
 
"So we will continue to pay our bills, but we may be able to extend that deadline [for extending the debt limit] then. The longer we extend it the more pressure we would put on the president to say he would come to the table with us and help us fix entitlements.
 
"But the only way he'll ever do it is, if we actually go through the deadline, but give him instructions that he takes tax receipts and he doesn't default on the debt," Paul continued. "Then we wouldn't scare the markets and I think then we would increase our leverage with every day we went beyond the deadline."
 
The problem is Republicans have failed in the past to unite behind similar legislation, a point Hannity noted could be even more difficult this time around, given the split among GOP members of Congress over the just completed fiscal cliff deal that raises taxes on the wealthy but does nothing to trim the debt.
 
"Will the Republicans do it?" Hannity asked Paul, who was elected to the Senate as a fiscally conservative tea party candidate in 2010.
 
"There's going to be repercussions if we don't do anything and I hope we will wake up and come to our senses and do something," Paul replied. "I, for one, will stand firm. I will not vote to raise the debt ceiling unless we get a balanced budget amendment to the Constitution because so far I've seen no objective evidence to trust [the Obama administration].
 
"They blow through all of their caps, they set spending limits and they go beyond them," he added. "They're not trustworthy with money or very good with it. So, we shouldn't give them more money. We should cut spending and make government smaller."
 
Asked if Republicans could expect to be blamed should another downgrade to the nation's credit rating occur, as they were during the 2011 debt limit debate, Paul insisted that rating downgrades have nothing to do with the politics of the debt fight.

Alert: End of America's Middle Class a Startling Reality. Read More Here.
  
"A year and a half ago, when we debated raising the debt ceiling, people were saying, 'Oh, you conservatives caused the down grade by being too vocal in your debate,'" he said.
 
"No, that has nothing to do with it. We get downgraded because we have a $16 trillion debt and we're borrowing $4 billion every day. We borrow $50,000 every second. That's why we're going to get downgraded and we've done nothing," Paul added.
 
"We took entitlements off the table. Entitlements is where two-thirds of the spending is. If you're not going to look at entitlements, you're not even a serious person and shouldn't show up or be paid for work."
 

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