If you think the United States has smooth sailing ahead because it passed the “fiscal cliff” without running ashore, think again.
There are more shoals and rocks ahead, and only expert navigation can lead the country past those obstacles without risk of a recession or worse. Most significantly, we are less than two months away from a huge decision regarding the debt ceiling.
Technically, the United States hit its current debt ceiling of $16.394 trillion on Dec. 31, but the Treasury Department has been using “extraordinary measures” to pay the nation’s bills — in other words it has been telling creditors “the check is in the mail.”
Republicans in Congress don’t want to endlessly authorize more borrowing as they have figured out that “borrowing authority” equals “spending authority” in the minds of many Democrats who have a huge social agenda that needs to be funded.
But under the current rules, the only power Republicans have is to threaten to hold the line of the debt ceiling, thus forcing a halt in borrowing, and a crash in numerous government programs that very likely would result in an economic crisis of unprecedented proportion.
That’s not much of a bargaining chip for Republicans, and yet we think most Americans agree with them that it is unwise, irresponsible and immoral to continue borrowing against future generations in order to pay for profligate spending today.
It is also not very good politics, as you would think the Republicans would learn some day. Threatening to crash the system in order to save it just makes the GOP look psychotic, and then when they inevitably surrender to avert a crisis, they come off as weak and confused.
Between the crushing reality of our spending addiction and the insanity of risking default or a depression, however, it is obvious that a new approach to the debt ceiling is desperately needed. Congress, in other words, needs to start acting like adults.
A promising proposal that would force them to do just that has come forward from the Concord Coalition this week. The coalition is a nonpartisan, grassroots organization dedicated to fiscal responsibility.
The coalition notes that if the debt limit is not raised, “All of the same obligations would still accrue. The only change would be to compel a default on commitments that result from past policy decisions... It has always been assumed, for good reason, that the United States of America would pay its bills. Refusing to pay some or all of its bills would not be an act of fiscal responsibility; it would be turning the federal government into a deadbeat.”
So the coalition proposes raising the debt limit immediately in order to end the “crisis” atmosphere and then promptly offer a reform that would prevent a similar crisis from ever occurring again. Maybe the coalition is hopelessly naive in its belief that negotiations could result in coming to grips with out-of-control spending and inadequate tax policies, but they are certainly right that the debt limit itself is a flawed mechanism that is just enabling irresponsible spending.
Rather than continuing to use the debt ceiling as a way for Congress to ratify its own earlier bad decisions, the Concord Coalition wants the limit to be an immediate factor in every spending decision Congress makes.
“Congress should more closely align debt limit increases with the fiscal policy decisions that create a need for more borrowing,” the group proposes in its recent position paper. In order to be fiscally transparent, Congress could order itself to require the inclusion of a debt limit increase in any bill that is expected to require borrowing that will exceed the current limit.
It’s not an answer to our spending problem, but as with alcoholism, there can be no solution until you first admit you have a problem.