As the big debt ceiling deadline nears, it is becoming increasingly clear that our government is not up to the task of writing a bill that will raise the debt limit and allow the government to function as normal. I am completely persuaded that not raising the debt limit will have disastrous consequences. I am also convinced that President Obama unilaterally raising the debt limit may forestall total disaster, but it won’t save the credibility of the United States government.
We have raised the debt ceiling dozens of times, and the fact that we cannot do so now underscores the fact that the federal government is now completely dysfunctional. Make no mistake — this dysfunction is the fault of the Republicans. For a bill to pass, it has to have the support of Republicans in the House of Representatives and Democrats in the Senate and of course a signature from the President. The House Republicans have chosen to ignore this fact and instead take hostages.
Tonight, it looks like their plan blew up in their face. In the next 72 hours or so, a few dozen Republicans are going to have to decide whether to hold firm with their caucus and destroy the economy, or vote for a bill that Democrats in the House will support. I honestly can’t predict which path they will choose.
Update: This Paul Krugman column makes the case that the media’s failure to clearly point out that the entire debt crisis is the result of Republican attempts to extort policy concessions from the President by threatening the credit line of the US government is a big part of the problem. How are voters supposed to hold politicians accountable if the media is not accurately reporting the degree to which they are complicit in creating our problems?
July 29, 2011 at 11:18 am
I feel certain that default isn’t going to happen. The interest will get paid first. And if the GOP won’t raise the debt ceiling in time, I expect Obama will let all other payments be delayed a few days, which will ratchet up the pressure on them immensely. If they still hold out, I expect he’ll either just declare the debt ceiling unconstitutional, or just ignore it and direct the Federal Reserve to pay whatever checks come its way. The GOP will freak out, mostly that they’ve just handed the President a brand new amount of power. I’m not sure how that would play out over the next 18 months for Obama, but I think he has the practical ability to prevent global economic meltdown and that he’ll use that power if it comes down to it.
July 29, 2011 at 9:38 pm
I’m actually feeling a bit hopeful these days. That our country can actually work toward a plan that would balance the budget (which means it’s not the Bohener, Reid or Obama plan). A government that’s not looking at $20 trillion in debt in a few years or $25 trillion in debt in 10 years. The question I like to ask is how much debt is too much before we insist something be done? For me, that was about $8 trillion and it’s definitely $14.3 trillion. I applaud the “obstructionists” who are holding the line and refusing to support any plan that doesn’t, at some point in the future, balance the federal budget.
July 29, 2011 at 9:40 pm
But the obstructionists have not put forth any sort of plan that would lead to a balanced budget.
July 29, 2011 at 9:50 pm
I’ve seen them put foward cut/cap/balance as well as the “penny” plan, both of which would balance. Of course both a DOA in the Senate/Obama’s desk…I sure wish Reid and Obama would quit holding this country hostage.
July 29, 2011 at 9:56 pm
I think Bruce Bartlett is right about the balanced budget amendment the Republicans put forth:
July 31, 2011 at 12:32 am
The problem of with all these arguments in the short term is that Congress has already approved what is being spent via the budget process, they are just refusing to borrow to pay for what THEY budgeted. I’m all for fixing the long term problems but this whole situation just makes Congress look like they don’t even know how their own branch of government works.
July 31, 2011 at 12:37 am
Also: We don’t need a balanced budget amendment – Congress already has they power to balance the budget if they desire, they just don’t have the discipline to actually do it.
August 1, 2011 at 7:30 am
Extraordinarily poor negotiating. Unfortunately the public does not understand this issue at all, though. They pretty much universally think borrowing more money is bad, whereas what the US economy actually needs is about a $3tn shot in the arm.