It’s only the middle of January, but the maneuvering is already well underway to see who will get the blame when the GOP refuses to raise the debt limit sometime in the middle of March and, shortly thereafter, declines to authorize a continuing resolution that would fund the government for the next year.
In the real world where one plus one equals two, the Republicans may have a point. They are dealing with a president who doesn’t believe we have a spending problem, and someone has to break through Barack Obama’s myopic worldview to set him straight.
But reality is not the way many of us would describe life in Washington, D.C. In our capital city, ordinary mathematics don’t apply. One plus one may or may not equal two depending on who’s doing the adding and how much pretending the rest of Congress wants to engage in. Hence, a $500 billion cut in reimbursing doctors and hospitals for Medicare expenses can actually be counted twice — once as a cut and once as a source of revenue for Obamacare.
The question then becomes, should the GOP House take the risk of blowing up the economy by refusing to authorize the Treasury Department to borrow money that has already been legally appropriated? In this, as with the virtual promise by many Republicans to shut down the government when the current continuing resolution runs out at the end of March unless they can convince the president to deal with the entitlement problem, the GOP is faced with unpalatable choices. And here, we must look at the question of proportionality. Is the drastic action on the debt limit and government funding threatened by Republicans justified? What imminent crisis — economic collapse, or depression, or any other calamity — is in front of us today that would warrant playing Russian roulette with the economy?
The fact is, there is none. We know that the path we are on is unsustainable. But that doesn’t mean catastrophe is imminent. And without a clear and present danger to the republic, it is extremely difficult to condone risking economic Armageddon to achieve so little. It is imprudent, even irresponsible, to take such a risk.
Is a reluctance to kick the can down the road reason enough to gamble that our already anemic economy won’t be plunged back into recession if the debt limit isn’t raised? House Republican Conference Chairwoman Cathy McMorris Rodgers thinks it is:
We always talk about whether or not we’re going to kick the can down the road. I think the mood is that we’ve come to the end of the road.
Have we really? Many in the GOP caucus are talking as if this is our last chance to save the economy. Rep. Jason Chaffetz:
No one wants to default, but we are not going to continue to give the president a limitless credit card.
Forget the idea of default — it won’t happen. We will continue to pay off our bonds month by month if necessary, using tax revenue that continuously comes into the Treasury. That doesn’t mean that the perception in the markets and overseas won’t be extremely negative. A downgrade of our paper is almost certainly in the offing and a roiling of the stock market is a virtual certainty as well. Besides that, anyone who says they are certain nothing much will happen — or that we face economic ruin — is just guessing. Simply paying bonds as they come due might mean we won’t default on our obligations, but what other psychological effects might a failure to raise our debt limit have?
Other budget obligations besides rolling over our debt won’t be met, however, and that probably means huge layoffs at companies doing business with the government. The rest is unknown. Might a refusal to raise the debt limit spark another banking crisis? No one is ruling it out. Foreign investors may flee the dollar, dumping massive amounts of greenbacks on the world market. No one is ruling that out either.
Is it prudent, responsible governance to risk this?
Republicans rightly took the president and Democrats to task for ignoring any potential unintended consequences from passing the massive Affordable Care Act. Are we now to turn around and ignore unintended consequences from not raising the debt limit?
The point is, given the possibility of disaster, and the absence of a contemporary crisis, what justifies Republican threats? Why does the GOP think they have to take a suicidal stand now, at this moment?
The rationale that if we wait until a real crisis is upon us it will be too late makes sense, but that explanation fails to address the question of “why now?” Why not six months from now? Why not next year? There is no compelling reason other than a deliberate choice by House Republicans to force the issue here and now. And without any more justification than that, the actions by the GOP would appear petulant — even unbalanced.