A Modest Proposal On The Debt Ceiling

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There will continue to be a lot of talk about solutions to making sure the United States avoids the arbitrary debt ceiling, which is expected to be reached in February.  Barack Obama has said he refuses to negotiate on the matter, and Republicans have stated they are ready to shut down the government if no solution is reached.

Frankly, this is nonsense from all sides.

I spoke about why Obama must deal with Republicans on this issue in a recent blog post.  For all the talk on the left, Obama realizes he has four more years of having to deal with a House that most likely will be controlled by Republicans, and more than likely by John Boehner.  He cannot further alienate a Republican caucus that is already not likely to work with him on many issues, and hope for any significant legislative successes in his 2nd term.

As for the GOP, they simply don’t have as much leverage as they believe.  I don’t think shutting down the government, ironically, would hurt them that much.  It didn’t hurt them in 1995, despite conventional wisdom in the media (Clinton did win the White House in 1996 against a flaccid Bob Dole, but the GOP held Congress; so what damage did the shut down really do?).

What could cause the Republicans damage, however, is any further downgrade in America’s credit rating, and any collateral economic damage.  Obama could, with some credibility, say Republicans are sacrificing everything for their quest to reduce the debt ceiling.  The media would support him, and the obvious damage to the House Republicans would worsen their already weak position.

First, the GOP must accept that this President doesn’t give a damn about long term debt or fiscal sanity.  He can talk all he wants, but his actions and proposals show that his interests lie elsewhere.  Furthermore, because of this reality, the best conservatives can do is marginal cuts on the fringes of the budget, while restraining growth in spending as much as possible.  That is a gut punch for most of us that believe in fiscal responsibility, but that is the reality we must come to face.  Elections have consequences.

So the GOP this week came to the same reality I came to a few weeks ago…this is the wrong fight to have.  Instead, we should be focusing on spending, which means we must focus on the budget.  The debt ceiling is a canard, a fictional implement that may be useful as leverage, but in this scenario provides little of the latter.

Keith Hennessey has an excellent piece in the Wall Street Journal this week, which proposes numerous steps Republicans should take instead of fighting over the debt ceiling along.  He makes too excellent suggestions:

That brings us to step two, which is for congressional Republicans to offer Mr. Obama a choice. He can have a long-term debt-limit increase if he agrees to cut spending, or he can have repeated, short-term increases without spending cuts. If the president continues to dodge the country’s long-term spending problem, the solution is to force him to ask Congress every few months to give him the authority to borrow more while facing questions about why he refuses to restrain spending.

Step three is the critical lever for applying public pressure to Democrats to cut spending. Congressional Republicans would explain that they will support the first alternative—a long-term debt-limit increase coupled with spending cuts. They will allow short-term debt increases to occur—but they will not support them.

This means that if Mr. Obama agrees to cut spending, he will get his long-term debt-limit increase and most Republicans would vote for it. If, however, he refuses to cut spending and instead chooses repeated short-term increases, then he and House Minority Leader Nancy Pelosi would have to ensure that all 197 House Democrats vote aye. House Speaker John Boehner would commit to delivering only the 20 or so Republican votes that are needed to ensure the bill passed.

I like the concept of forcing Obama to make the choice, instead of Republicans.  However, I wonder if most of the public is interested enough in the nuances to understand the process as much as Hennessey would like.

I prefer a more straight forward approach, centering around the budget.  Congressional Republicans appear ready to extend the debt ceiling to April 15th, and then put the onus on the Senate to move forward with a budget.  The continuing resolutions funding the government expire on March 27th, and that would be the next stumbling block to fund the government.

But the key is the second part of the equation.  The GOP should require that the Senate pass a full, complete budget.  No more continuing resolutions.  The GOP should agree to raise the debt limit as necessary, but to make Democrats actually put a budget together, as required by law,  in order to move forward.

I believe tactically, this is a better position for conservatives.  The debt ceiling sounds like a great hill to fight and die on, but that is not really the case. The ceiling is meaningless in and of itself; what we are really fighting for is to decrease spending going forward, not to maintain some artificial limit we all know will eventually bypassed.

The House should be open to compromises on the budget with the Senate, as needed.  We will not get 100% of what we want.  However, if the Senate refuses to pass a budget, the House GOP should pass a full budget of their own…and go home.  They would be following the Constitution and the law as it stands.  If Democrats wish to continue their illegal incompetence and refuse to take responsibility for their ridiculous spending, then they and they alone hold the ownership over any government shutdown that occurs.

So let the debt ceiling be bypassed.  But let us force the Democrats to follow the law and follow the correct method in defining what spending the Government does.  The media may still support the President, but this is far harder case for liberals to make.   Will they argue that Congress should not be responsible and follow the law and pass a budget?  Let them defend that, if they will.

This was cross posted at the Spitcracker Picayune