Well, here we go again.
The United States has formally hit its debt ceiling, forcing the Treasury Department to give itself extra time to continue paying the bills with what it calls “extraordinary measures.” We’re not truly near the red line yet – we probably have a couple of months worth of breathing room thanks to these extraordinary measures, so the real deadline will come in early summer. These measures, in fact, aren’t really that extraordinary – at least, not anymore. Essentially, they’re a series of accounting gimmicks that won’t affect the day-to-day lives of most Americans.
No matter what you call it, the government is still going to need to keep borrowing more money, and it will need the permission of Congress to do so. That means that, whether he wants to admit it or not, President Biden will need to negotiate with House Speaker Kevin McCarthy to get it done. For now, Biden is refusing to negotiate, insisting that Republicans lift the debt ceiling without any negotiations, but that’s a nonstarter.
Negotiations of some sort will certainly have to take place. The question is, what can the White House give that will satisfy Republicans?
While it may seem counterintuitive, the conditions may actually exist for a sweeping deal that benefits both sides. The last time Republicans attempted to go this route, they failed. In 2011, they initially overreached in their demands, then passed a bill that was intended to force negotiations but failed, causing major budget cuts or “sequestration” to go into effect. This time, they need to make more reasonable demands and be willing to make serious concessions to achieve them.
It will take quite a bit of back-and-forth to get there. The first demand Republicans should make is that any deal they agree to will only extend the debt ceiling by approximately one year. That would mean it would come up again not five years from now, when a different president and different congressional leadership might be there, but smack dab in the middle of an election year. Indeed, it would land right before most members of Congress are eager to jet out of town and start fighting their reelection campaigns, while President Biden would be busy running for reelection.
Believe it or not, the threat of interfering with their political campaigns might actually be larger than the threat of sweeping budget cuts imposed in the last debt ceiling deal. It’s all too easy for politicians from both parties to escape blame for budget cuts – or any other actual policy consequences of their actions: they simply blame the other guy. Interfering with reelection campaigns or vacation plans is quite a different matter. That’s not some distant problem they can blame on the other guy and use as a cudgel to win reelection; it affects them personally.
In the meantime, during that extension, Congress should form a new committee to reconsider the entire structure of the federal budget. If this concept sounds familiar, it’s because it did exactly this during the 2011 debt ceiling crisis, but the effort failed miserably because the penalty for failure was the aforementioned sequestration. The negotiations went nowhere, the cuts went into effect, and everybody just moved on.
This time, rather than forcing budget cuts, the penalty should be having to relitigate the debt ceiling in the middle of an election year. That’s much more punitive.
As for the scope of this bipartisan committee, nothing should be off the table. They should be able to consider changes to Medicare, Social Security, defense spending and any other federal program. They should be able to consider the possibility of raising taxes, too, or eliminating entire departments and programs.
Now, here’s the real part that could be a reward to both sides, besides escaping an election-year crisis and fixing real problems: the elimination of the debt ceiling.
That’s right, one of the clauses of this agreement should be that if Congress passes the committee’s recommendations, the debt ceiling is extended permanently. This would give this Congress, and President Biden, the chance to not only address the nation’s underlying fiscal woes but to permanently end this kind of stand-off. This solution may be implausible, even in normal times, but keep in mind as the doomsday rhetoric unfolds in the coming weeks that the problem could be solved fairly easily with the political will to solve it.
Jim Fossel, a conservative activist from Gardiner, worked for Sen. Susan Collins. He can be contacted at:
jwfossel@gmail.com
Twitter: @jimfossel
Send questions/comments to the editors.
