The debt war is about to begin, again. Some Republicans voted for an abysmal fiscal deal, which didn’t cut spending – and showed how compromise and bipartisanship are overrated virtues. Conservative commentator Charles Krauthammer noted that this was a “complete surrender on everything.The ratio of tax hikes to spending cuts is 40:1 rather than 1:1, or 1:2 or 1:3. So, it was a complete rout by the Democrats.” Mark Steyn was much more animated writing for the Ocean County Register on January 4.
No epiphanies in Washington: The Congressional Budget Office estimates that the latest triumphant deal includes $2 billion of cuts for fiscal year 2013. Wow! That’s what the Government of the United States borrows every 10 hours and 38 minutes. Spending two months negotiating 10 hours of savings is like driving to a supermarket three states away to save a nickel on your grocery bill.
So, with the debt ceiling fight ahead, and the sequestration battle within the next two months, what can Republicans do to regain the high ground? Keith Hennessey wrote for The Wall Street Journal today that:
[S]tep one is for House Republicans to argue for and pass a debt-limit increase combined with present and future spending cuts. Mr. Obama will reject deep spending cuts and accuse Republicans of playing dangerous games with our financial system. So what next?
The president wants a very large increase in the debt ceiling—he and his team have demanded either no limit at all, or a five-year increase, which means at least a few trillion dollars. His obvious goal is to punt the issue past the 2014 midterm election. Yet if he has to ask Congress for a new increase every few months, the spending problem his administration has exacerbated in his first term will dominate the policy agenda—when he wants to work on other issues.
That brings us to step two, which is for congressional Republicans to offer Mr. Obama a choice. He can have a long-term debt-limit increase if he agrees to cut spending, or he can have repeated, short-term increases without spending cuts. If the president continues to dodge the country’s long-term spending problem, the solution is to force him to ask Congress every few months to give him the authority to borrow more while facing questions about why he refuses to restrain spending.
Step three is the critical lever for applying public pressure to Democrats to cut spending. Congressional Republicans would explain that they will support the first alternative—a long-term debt-limit increase coupled with spending cuts. They will allow short-term debt increases to occur—but they will not support them.
This means that if Mr. Obama agrees to cut spending, he will get his long-term debt-limit increase and most Republicans would vote for it. If, however, he refuses to cut spending and instead chooses repeated short-term increases, then he and House Minority Leader Nancy Pelosi would have to ensure that all 197 House Democrats vote aye. House Speaker John Boehner would commit to delivering only the 20 or so Republican votes that are needed to ensure the bill passed.
Hennessey reiterated this strategy of pegging spending cuts to the debt ceiling increase to Senate Republicans, but urged them to oppose, not filibuster, the three-month increases on the debt ceiling. The goal is to show that Democrats are the ones who are solely responsible for the borrow, spend, and tax methods that are crippling the economy. Will this lead to electoral gold? It’s dubious at best, right now. I would bet that this upcoming fight to renew the assault weapons ban would have more of a bearing on the 2014 midterms, and that polls showing Americans are more concerned about the economy, as oppose to gun control, could be another area of attack. Why focus on guns, if people are clamoring about the debt and deficit? Additionally, I’m always a bit hesitant about these “wait and see” strategies.
Nevertheless, John Parkinson of ABC News wrote today that Rep. Paul Ryan told the press that:
conservatives could agree to a short-term increase to the debt limit. “We’re discussing the possible virtue of a short-term debt limit extension so that we have a better chance of getting the Senate and the White House involved in discussions in March,” Ryan, R-Wis., revealed during an off-camera discussion with reporters tracking the retreat. “What we want to achieve at the end of the day is a two-way discussion between Democrats and Republicans and, out of that, hopefully, some progress being made on getting this deficit and debt under control – because we really do believe that our obligation is to help prevent a debt crisis from hitting this country.”
Ryan declined to detail the terms of a possible short-term extension, but said that given “the realities of divided government” challenging lawmakers, he hopes Republicans “achieve consensus on a plan to proceed so that we can make progress on controlling spending and deficits and debt.
Let’s see what happens.