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Three weeks from today, the United States will have exhausted all of its remaining options and will lose its ability to pay the nation’s bills. Raising the debt ceiling would fix the problem entirely, but congressional Republicans don’t want to and aren’t willing to compromise.
With just 21 days to go, this is starting to look a bit like a car accelerating towards a cliff with no guard rail. GOP leaders say they’d like to avoid the disaster, but don’t like any of the proposed options.
But let’s not forget a simple truth: in this little metaphor, the brake works fine. Policymakers simply have to muster the will step on it.
A lot of crises are extremely difficult to resolve. This isn’t one of them. The threat of an economic collapse could be eliminated entirely in five minutes — all Congress has to do is raise the debt ceiling, just as previous Congresses have done dozens of times for decades.
Rachel Maddow noted last night that since the Kennedy presidency, lawmakers from both parties have voted to raise the debt ceiling 74 times. During the Bush presidency, Republicans did it seven times. The current GOP leadership in Washington has voted to raise the debt limit 19 times. (Sorry, Eric Cantor, it’s too late to pretend like this is some sort of gift to Democrats.)
Mitch Daniels, the conservative Republican Indiana governor and former Bush budget director, explained that “a responsible government” must routinely raise the debt ceiling. “This ought to be treated as the housekeeping matter it is,” Daniels said. Ronald Reagan warned that failure to raise the debt limit would lead to consequences too “awesome to contemplate.”
As Matt Yglesias explained yesterday, one effortless vote makes the entire problem disappear.
Surveying the scene, perhaps everyone should take a deep breath and recall the traditional way the country has avoided default when the debt ceiling needs raising: Congress raises the debt ceiling.
It’s that simple. The same kind of “clean” debt ceiling increase that’s passed repeatedly over the past 100 years will allow the country to avoid default without tax increases, without defense cuts, and without slashing entitlement spending. Education will be spared. So will transportation, health care, farm subsidies, and everything else. The interest rates investors are charging the American government to buy our debt are extremely low right now. The world economy is suffering from an excessive demand for American debt, not by reluctance to lend. All we need to do to keep our finances flowing is to raise the statutory debt ceiling…. Right now, though, the only crisis we face is an entirely self-created one.
GOP leaders insist they can’t do this because their political philosophy won’t let them. This might be slightly less laughable if they hadn’t already raised the debt ceiling — many times and without conditions — just a few years ago.
Off the top of my head, I can’t think of any potential crisis that’s so serious and yet so easy to resolve. Indeed, by some measures, the 14th Amendment actually compels Congress to act, suggesting policymakers have a constitutional obligation to protect the full faith and credit of the United States.
This entire dispute can end in five minutes, at which point, the parties can go back to arguing. But Republicans don’t care. It’s the greatest scandal Americans haven’t heard much about.
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Josef K on July 12, 2011 9:00 AM:
Here's a further bit of irony: should a default or premature market panic happen, the GOP's corporate buddies have only themselves to blame. They're the ones who financed last year's elections and the selected candidates.
Cold comfort for the rest of us who'll have to clean up behind that chaos, but a sort of comfort nonetheless.
c u n d gulag on July 12, 2011 9:00 AM:
Maybe we need an easier way to explain this to the simpletons out there - both in the MSM and the public, who are the victims of the MSM.
The Republican in charge could have gone into the bank with the Democrats for a loan extension - from the bank.
Signed it.
Gone home.
And worked on a new budget.
Instead, the Republicans decided to grab the bank hostage, and are demanding the money for the loan come from the poor people in the neighborhood.
Let's hope the Democrats don't decide to help them in their efforts.
John Dillinger on July 12, 2011 9:04 AM:
How much in additional debt would the Ryan budget plan the Rs voted for just a few weeks ago add? And now they don't want to raise the ceiling? This hypocrisy should be front and cent in every D's talks with the media.
zandru on July 12, 2011 9:06 AM:
"the greatest scandal Americans haven't heard about"
I disagree that we "haven't heard about" it. The problem is that so few actually understand it. You poll people, and they'll tell you no! we shouldn't borrow more! we need to pay our debts!, as if the National Debt is like an overdrawn credit card and the United States of America is just like a young woman with a thing for retail therapy.
All those uninformed voters are calling their congresspersons and the White House, telling their elected representatives hell no! DON'T INCREASE THE DEBT LIMIT!!!
What are the people who know better doing? (hint, hint)
Big River Bandido on July 12, 2011 9:07 AM:
That's exactly the line the Democrats should be taking. They should walk away from the table and make the Republicans own the issue. The House, after all, is constitutionally required to lead on fiscal matters, and the Republicans have the majority.
Further, the Republicans' corporate owners are not going to allow them to default on the debt. They're only stalling to see if they can defraud the country, yet again, this time by stealing money from seniors and the poor. If — and only if — Dems put their feet down and make it clear they're not going to "deal" on something that requires no "deal", Wall Street will step up and give their marching orders to the Republicans.
jjm on July 12, 2011 9:11 AM:
Well, Josh Marshall at TPM is wondering why Obama doesn't do what Clinton did, start shutting down large segments of the government. That would satisfy the GOP, no? Stop payments to military suppliers, big agriculture, etc. Then halt SS and Medicare... the GOP wins, no? Isn't that what they keep SAYING they want?
Well, O called their bluff yesterday, and although the media didn't get it, the people will see that the GOP has been nothing but HOT AIR all along.
Chris- The Fold on July 12, 2011 9:19 AM:
Steve, you are onto it. But just go ahead and say it.
Here's what this is about. Would you sit down and negotiate the fate of this country with someone you have spent the last two years saying is an enemy of this nation trying to destroy it from within? Of course you wouldn't.
That's what's going on here. That's why Cantor said the other day that just sitting down with the president to talk about raising the limit is a concession. They are appalled that they have to treat him like he's a legitimate leader of this country. And that flies in the face of their base and modern ideology.
The whole debate can be changed by just admitting this is about negotiating with someone they don't believe is truly a legitimate president.
Darsan 54 on July 12, 2011 9:23 AM:
I like the idea of shutting down what would be essential services for Republican voters. I really like the idea of cutting off payment to military suppliers and outside vendors. Maybe the government could just commender supplies under some emergency powers act, but forgo payment until after the emergency, which of course would never end.
Show some fortitude please.
berttheclock on July 12, 2011 9:25 AM:
Yesterday, Matthews had one of the biggest hypocrites of the RepuGs on his show. US Rep John Culberson, of the 7th District of Texas, is no TP newcomer. He came into office in January, 2001. Therefore, he was part and parcel of the Bush tax cuts and the massive war spending.
Culberson is a hypocrite because he is a lock step RepuG who tries to place all of the blame on the run away Democratic spending and "Obamacare". He brought up the canards put forth by his predecessor, Bill Archer, Jr, now with PriceWaterhouse, who has presented a chart showing, "In his opinion" any tax increase will not reduce the debt. Culberson uses the RepuG Mantra of "The people gave us a mandate in the last election to cur spending". Culberson and his ilk brought us into this economic mess and his votes on tax cuts brought not one job into this country. The only trickle down of that tax cut went into the interest producing accounts of the very wealthy who never used it to create jobs in America.
Peter C on July 12, 2011 9:25 AM:
Indeed, Republicans are breaking faith with the country. What was the bargain at the beginning of the year (to continue the Bush Tax cuts for the millionaires) but an agreement spend more and tax less? What was the torturous budget agreement this spring if not an agreement about what we'd spend and where the money would come from? Is it possible to make these bargains (which ensure an increase in the public debt) but prevent the raising of the debt? No. They are going back on their word. They are breaking their promise. They are violating the trust of the public. Anything other than a clean bill proves them faithless and untrustworthy.
Basilisc on July 12, 2011 9:26 AM:
Hey Steve, maybe it's time for a new campaign, like last year's "Pass the damn bill".
Repeat after me: "Raise the damn ceiling". There, now that wasn't too hard, was it?
walt on July 12, 2011 9:26 AM:
Scandal itself is a success, as many starlets or semi-talented celebrities know. And it's this quality that makes today's Republican Party starkly different than even Reagan's. Right now, the party is jazzed and energized with rage. Everything is Obama's fault! Everything! And you don't reason with that attitude or even placate it. You can't because there are effectively no adults left to talk these people down.
This is the new normal in American politics. It's not as if we're going to get saner once this crisis is over, either. Indeed, this crisis is part of a larger crisis of legitimacy and authority in American politics. If there's a resolution on the horizon, it's at least 10 years out.
Anonymous on July 12, 2011 9:37 AM:
Swiss Debt Brake:
http://www.imf.org/external/pubs/ft/wp/2002/wp0218.pdf
T2 on July 12, 2011 9:39 AM:
Walt is correct..this is the new normal. A two party system where one party seeks to represent the full spectrum of Americans and solve problems, and the other operated by crooks, liars and, yes, racist religious nuts.
Whether or not the Debt Ceiling got raised one hour from now, the marker that signals the end of decent governance in this nation, I fear, has been laid. I just don't know what the future has in store. The south is baking, economy in the dumps, and voters are electing insane people to represent them. I really can't see us going back to the good old days unless we go so far down it destroys the fabric of the nation before it can hope to rebuild. Right now, that's the direction we are headed in.
Marko on July 12, 2011 9:40 AM:
GOP leaders insist they can’t [raise the debt limit] because their political philosophy won’t let them.
Yet, they already spent the money!.
Note to other posters up-thread: Even if Obama shut down the entire government today, we would still have to raise the debt limit because congress already spent the money!
square1 on July 12, 2011 9:41 AM:
In many ways, Benen's attitude mirrors the GOP: "there is a simple solition: just give me exactly what I want!". Now I happen to agree with what Benen wants (a clean debt limit increase) and disagree with what the GOP wants (an increase in the debt limit that is no larger than spending cuts, plus no tax increases) but Benen's solution ("just give me what I want!") is no simpler than the GOP's solution ("just give me what I want!)
The problem is that Dems validated the GOP's demands months ago. I don't mean that they agreed with the GOP's demands. Just that they accepted the premise that it was just as legitimate for the GOP to have conditions as for Democrats to have demands before the debt limit would be raised.
The time for Democrats to insist on a clean debt limit increase was months ago.* Having failed to make that argument at that time, and having spent weeks negotiating with the GOP and pressing for a large, bold deficit-reduction package, Democrats have missed the window of opportunity to argue that the GOP should simply pass a clean debt limit increase.
It isn't that Benen is wrong, it's that his post fails to note the real world political realities that exist and have existed for weeks and weeks.
Marko on July 12, 2011 9:46 AM:
"Everything is Obama's fault!" - Walt
Yes, I think this is the GOP strategy to make America forget how truly bad a president GWB was. I think they are afraid that with a little cooperation on the Republican side, BHO could be a truly great president. Too bad for us.
Toon Moene on July 12, 2011 9:48 AM:
Or, in the alternative, the US of A could do what every other responsible democracy does:
Work without a rigid debt ceiling.
Seriously, what reason is there to keep this political football around ?
JD on July 12, 2011 10:48 AM:
According to Lawrence O'Donnell, a clean bill might be what Obama is working towards now. Let's hope.
Jon on July 12, 2011 10:57 AM:
Yeah, I mean the GOP made itself a box and now it's stuck in it and can't get out. It's pathetic. Eventually they'll get tired and do whatever they have to to get out.
Joe Friday on July 12, 2011 11:01 AM:
Mitch Daniels, the conservative Republican Indiana governor and former Bush budget director, explained that "a responsible government" must routinely raise the debt ceiling. "This ought to be treated as the housekeeping matter it is," Daniels said.
This has been my point all along. Obama really stepped in it by not telling the Republicans he would only sign a clean bill like they just did 7 times under Chimpy Bush. It would have been a FAR more defensible position.
larry birnbaum on July 12, 2011 11:18 AM:
I don't know what the President's authority to pick and choose what gets paid and what doesn't when the debt ceiling is reached. Obviously bonds have to be paid. But what after that?
Here's a suggestion: pay for discretionary spending (i.e., not debt, entitlements, or defense) only in Congressional districts where the Representative agrees publicly and unambiguously that the debt ceiling should be raised. If a business is in a district where the Representative is against a clean bill raising the ceiling, no payment; if ARRA or other discretionary government work is going on in that district, it ceases. And maybe throw in slowing down payments to businesses in states where at least one Senator doesn't unambiguously support raising the government's borrowing authority.
Scott on July 12, 2011 11:37 AM:
The time for Democrats to insist on a clean debt limit increase was months ago.
This is somewhat true, but I think it probably will also work on a curve. As the clock runs down, time for negotiations runs out, time to script a compromise bill evaporates, and at some point a clean debt increase will be the only possible solution left.
Assuming there is some segment of Republicans in the House who genuinely meant what they said about the need to raise it, they will then be able to do so in a clean vote. "We just ran out of time," is going to sound like a lame excuse to constituents, but it is beginning to look like the only excuse they are going to get.
yellowdog on July 12, 2011 12:43 PM:
Come on, Steve: Republicans are masters of the made-up crisis:
-Terri Schiavo was a crisis
-Grenada was a crisis
-The list in McCarthy's pocket of commies in power was a crisis
-Bill Clinton's dalliance with an intern was a crisis
-Muslims at Ground Zero was a crisis
And on and on. The sham crisis is what they teach young Repubs in Rove Politics 101.
Adam on July 12, 2011 12:52 PM:
Scott - interesting point. I think the Republicans believe that their negotiating power just gets stronger as the deadline approaches, which is why they're stalling, pulling out of talks, etc. Republicans assume that Senate Dems/Obama will panic late and give them a better deal at the last minute than they could get today. Maybe they can even get Democrats to take shared ownership of Medicare cuts and then Republicans will spend the next two years saying Democrats voted to cut Medicare so we could give money to China. This is pretty much a carbon copy of the budget/shutdown talks: GOP stalls to the very last mintue, the press blames everyone equally (which, by the way, serves Republicans better since they're considered the "anti-government" party), and then they reach an agreement that nobody really likes. Just like the govt shutdown bill, I wouldn't be surprised if Obama lets Boehner pretend that he got the better of the deal until his caucus votes for it.
rweinkam on July 12, 2011 1:54 PM:
Here is a plan:
The Administration and congress work on an agreement to raise the debt ceiling up to 22 July
On 22 July, the Administration present a plan - either an agreement with Congress or a plan that includes agreed steps and steps that are in the long term financial interest of the country.
On 25 July, the Treasury Department presents a list of what will and will not be paid in the Debt Limit is not increased.
On 27 July, the Administration presents the likely impact on interest payments, stock and bonds and the economy if the Treasury list is implemented
On 29 July, the House votes on the proposed Bill.
On 1 August, the Senate votes on the Bill.
It is only fair that we all know the consequences of this confrontation.
Alex Votocracy on July 13, 2011 7:27 PM:
How possible is it that both parties will agree for the greater good? Take our polls later this week and tell us what you would do about the deficit. http://bit.ly/Votocracy