Options Limited in Debt Ceiling Mess
There are many approaches to the current debt limit mess and few of them are likely to work. The Cut, Cap and Balance bill that recently passed the House is unlikely to pass the Democratic-controlled Senate and, even if it did, President Obama has said that he would veto it. Even if he signed it, eventual ratification of the contemplated constitutional amendment by two-thirds of the states would be needed lest we be right back where we are -- except for a big and quick increase in the debt limit likely followed by another in due course.
The Gang of Six plan, which President Obama seems to like, consists of five pages of highly non-specific language. If set to music, it might be a charming lullaby to put us to sleep. Beyond that, however, in its present form it can't take effect anytime soon. It first has to be converted into legislative language and then evaluated by the Congressional Budget Office; as of now, there is nothing capable of being evaluated or enacted.
Nothing else presently in play is likely to pass the Congress by August 2, or even soon thereafter. Still, something will be done -- perhaps just standing by and continuing to blather as the magic date comes and passes, with the problems unresolved and getting worse. There is likely no good outcome, nor, in view of our profligate spending, can one reasonably be expected. The "unexpected" debt limit mess has persisted far too long for anything better than the least bad outcome to be anticipated.
The debt limit mess has distracted us from other problems potentially even more severe than our domestic tribulations. The situations in the Middle East, on the Korean peninsula, in China, and in Russia continue to fester; the leaders there haven't been kind enough to call a time out while we get our domestic act together. As we continue to fret, fume, and mumble it seems likely that they are thinking of ways to promote their own agendas rather than ours. The longer we take, the longer they will have and the less prepared -- or even able -- we will be to respond.
An interesting proposal was made by a Mr. Tony Blankley and published by Rasmussen as a way to get past the current debt limit mess. After explaining the lack of rationality embedded in the mess and in the reactions to it, he suggests:
The House should pass a debt ceiling rising for 190 days that raises the ceiling by about $1 trillion. The president said he would not sign a short-term bill as long as 180 days. Give him something he could sign without contradicting himself.
Ten days more than President Obama has already rejected seems unlikely to be accepted, unless as a part of the Gang of Six plan as a stop-gap ploy; while apparently thinking that courageous restraint is good on a real battleground, President Obama does not seem to find it acceptable for himself or for his colleagues at home. In any event, it is unclear how the debt ceiling would revert even to the current one or what incentives there might be to make that happen.
Attach to it about $1 trillion in discretionary spending cuts as identified by the Vice President Joe Biden-led negotiations. That would get real cuts and wouldn't let Washington kick the can past the next election.
Spending cuts not put into specific legislative language capable of analysis by the Congressional Budget Office are meaningless. They are worse than a pig in a poke: at least with that it's possible to know how much the pig weighs and whether it is alive or dead and rotting.
Then the House Ways and Means Committee should start hearings and markup on a general corporate tax reform that would lower rates and reduce or eliminate many credits, deductions and advanced schedules. That would take at least three months to negotiate but should yield both a more efficient system and more revenue (about $100 billion a year -- while lowering rates).
Where does the $100 billion a year figure come from and how could the House Ways and Means Committee devise something in a very short time likely to pass muster in the Senate? At the Congressional Budget Office? With President Obama?
The Ways and Means Committee also should start hearings and markup on entitlement reforms -- Medicare, Social Security and Medicaid. Let Democrats and Republicans make their proposal hearings and markups open to the public.
Entitlement programs are very likely to be even more contentious in the Senate than revenue increases, particularly if they involve aspects of ObamaCare and structural changes to welfare systems in general. Again, how could something be devised in the House likely to pass muster in the Senate and to be signed by President Obama?
Thus, we get past the current Aug. 2 crisis and do so with real cuts. And by next spring's budget season, we can have an honest debate during the presidential and congressional election cycle on the two parties' long-term solutions to debt and deficit. Let the electoral chips fall where they may.
We might get past the August 2 crisis, but to characterize the proposal as including "real cuts" -- unless perhaps of baloney -- approaches the mendacious.
In a few respects, Mr. Blankley's proposal resembles my own suggestion in a Pajamas Media article on July 18:
Grant an immediate one trillion dollar debt limit extension valid only through August 1, 2012, on which date the debt limit will revert to the present one. Borrowed funds are to be used only
1. To pay interest on debt,
2. To redeem debt when due, and
3. To provide necessary funding for federal operations as authorized by previously enacted legislation but only, (a) until August 1, 2012, or (b) as hereafter authorized by the Congress.
Mere promises to maybe deal with substance won’t be kept. This suggestion does not rely on promises and will dump the problem back in the Congress where it belongs. Majorities of both houses will, as always, be needed to pass the necessary legislation appropriating funds for specific purposes and refusing to appropriate them for other specific purposes. Both will be necessary. It will give the Congress a year to get its act together and, with some luck, force the beginnings of a balanced budget; only with the consent of both houses can the budget remain unbalanced. That’s the purpose of paragraph 3. The suggestion will require action by our CongressCritters, mindful of the fast approaching November elections, the results of which seem more important to them than anything else. (emphasis added)
I prefer my suggestions because they would grant a debt limit extension good only for one year and give our CongressCritters all the time they should need to deal with an impending reduction of the debt limit back to the now current level in one year -- when the 2012 elections are only a short way off. Putting decisions off until after the November 2012 elections would, of course, be far more appealing to our CongressCritters and to President Obama. However, we need there to be tremendous pressure actually to do some hard work, make a bunch of "tough decisions" and soon thereafter to face the consequences, good and bad, during the next electoral process rather than years later, in 2014 or 2016.
Default could have some good results -- disrupting the massively out of control federal spending first among them -- but then so could another nuclear option. No, not the Fourteenth Amendment option former President Clinton likes even though (or perhaps because) it makes no sense at all, but something even more draconian: resurrecting Guy Fawkes and sending him to do in Washington what he tried to do in England back in 1605 -- assassinate the king and blow up Parliament.
Good idea? No, of course not. We are a nation of constitutional principles and of laws even though President Obama seems to be neither proud nor fond of either. That heritage is about all we have left and it is fading. Despite President Obama and his colleagues, it will be necessary to work within the system by using every lawful means available; voting next year is a crucial part of that. Forcing those up for reelection to act in accordance with the best interests of the nation, rather than merely their own, if they wish to be reelected is the only viable way to solution.