Government: Trading the debt ceiling for another hostage
Although some Republican lawmakers pooh-pooh the consequences of not raising the debt ceiling, many have accepted the warnings from the Treasury Department and others that the economy could be seriously damaged if the government started stiffing some creditors. Still, as a group Republicans remain eager to use the leverage that the debt-ceiling bill provides. How else could they force Democrats to cut spending?
That's a fair question. But it makes me wonder whether the way to end the debt-ceiling brinkmanship is to give the GOP a different legislative hostage.
Consider this observation from veteran Congress-watcher Andrew Taylor at the Associated Press, noting a conspicuous area of agreement between the debt-ceiling proposals floated by Senate Majority Leader Harry Reid (D-Nev.) and House Speaker John Boehner (R-Ohio):
One area of potential compromise could be how to treat the findings of a bipartisan congressional commission to identify further deficit reductions, especially in major health care programs such as Medicare and Medicaid. Both Reid and Boehner support the idea, though Boehner wants to make a future increase in the debt limit contingent on the proposed additional cuts being enacted into law.
Boehner tied the commission's work to the debt ceiling as a way to ensure that a) the commission actually comes up with a proposal to cut the deficit significantly, and b) said proposal has a good chance of passing. But there are other ways to achieve those fiscal goals. The trick is to find the right enforcement mechanism.
One idea floated by the GOP in its talks with the White House was to eliminate two key pieces of last year's healthcare reform law -- the individual mandate to buy insurance and a new cost-cutting Medicare advisory commission -- if the deficit-reduction goals weren't met. The White House countered by calling for one of the GOP's sacred cows, the Bush-era tax cuts, to expire if Congress didn't meet the deficit targets.
These ideas were rejected, in part because each would give lawmakers who oppose "Obamacare" or the Bush tax cuts an incentive to vote against the commission's proposal. The right fail-safe mechanism would be something that neither side wants to come to pass but that would reduce the deficit significantly without tanking the economy. How about a combination of automatic, across-the-board cuts in all spending programs (with the possible exception of Social Security, which doesn't contribute to the deficit) and tax increases that grow larger each year? There's something for both sides to hate, yet the gradual phase-in should limit the shock to the fiscal system.
There's not a whole lot separating congressional Republicans and Democrats when it comes to the initial round of spending cuts. The main sticking point has been the enforcement mechanism tied to the second round of deficit reduction, which would be entrusted to the bipartisan commission. (Granted, some Republicans don't want the commission to consider tax increases either, but the proposal that Boehner offered this week wouldn't foreclose that option.) A solid enforcement mechanism vitiates the need to hold the debt limit hostage. Lawmakers, point your guns at a different head.
Photo: House Republican leaders speak to the press about the debt ceiling Tuesday. Credit: Win McNamee / Getty Images