President Obama and congressional Republicans

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) May 17, 2011 -- The year was 1970. A Republican president called for an increase in the debt ceiling. A powerful Ohio Democratic congressman wanted something in return: deep spending cuts.

Richard Nixon got his way; Charles Vanik did not. Congress raised the federal debt limit — as it has 78 times since 1960 in what has become a familiar ritual.
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The roles have been reversed this spring. President Obama and congressional Republicans, led by House Speaker John Boehner of Ohio, are sharply at odds over major spending cuts to reduce the deficit. Republican leaders have demanded such cuts as a condition for raising the debt ceiling.

"No one wants to vote to increase the debt limit," said Donald Marron, a former economic adviser to President George W. Bush and now director of the Tax Policy Center. But neither does any leader in Congress dispute that "the cap has to go up."

That history explains why financial markets have shrugged off the drama now building around the debt limit. When Boehner warned last week that "there will be no debt-limit increase" without deep spending cuts, his audience at the New York Economic Club responded with polite applause and no apparent alarm.

"The likelihood of an actual default, that Treasury misses an interest payment, we would say is very remote," said Terry Belton, head of fixed-income strategy for JPMorgan Securities. "But if it's not raised by the end of July, the markets would get very jittery then."

Congress assigned itself the debt-limit chore when it first limited federal borrowing authority in 1917, after the United States entered World War I under President Wilson.

The ceiling turned into a reliable instrument of partisan and ideological combat. And because persistent government deficits required it to rise regularly, the debt limit turned, by the late 1960s, into a favored vehicle that lawmakers could use to pursue other goals.

Many have focused on budget restraint. But Democrats and Republicans also have used debt-limit fights to try to freeze nuclear weapons, ban school busing and allow school prayer, according to a 1993 study by the University of Missouri political scientists Linda Kowalcky and Lance LeLoup. Then-Senate Majority Leader Howard Baker, R-Tenn., attracted 1,400 proposals in the early 1980s when he threw a debt-limit bill open to amendments on other issues.