The nation’s “debt ceiling” will need to be raised early in the next Congress to accomodate the new reality of trillion-dollar-plus annual deficits.
The possibility that the Republican House will refuse to raise the debt ceiling is the favorite topic of discussion in the media and by the Obama administration. There seems to be a double-dare going on here, as evidenced by the statements yesterday by White House economic advisor Austin Goolsbee:
“This is not…this is not a game. You know, the debt ceiling is not…is not something to toy with. That’s the…the…if we hit the debt ceiling, that’s the…essentially defaulting on our obligations, which is totally unprecedented in American history. The impact on the economy would be catastrophic. I mean, that would be a worse financial economic crisis than anything we saw in 2008.
“As I say, that’s not a game. I don’t see why anybody’s talking about playing chicken with the…with the debt ceiling.
“If…if we get to the point where you’ve damaged the full faith and credit of the United States, that would…that would be the first default in history caused purely by insanity.”
Republicans who talk about not raising the debt ceiling, or tying a raising of the debt ceiling to some other budgetary agreement, are falling into a trap. I disagree with Jim DeMint on this point:
“I think we should resist that. We need to have a showdown, at this point, that we’re not going to increase our debt ceiling anymore. We are going to cut things necessary to stay within the current levels, which is over $14 trillion,” DeMint told the conservative magazine Human Events in an interview released Monday. “So this needs to be a big showdown.”
The debt ceiling is the fight Democrats want to have, because eventually Republicans will have to cave on the issue. By making raising the debt ceiling the test of congressional power, Democrats are fighting a battle they will win even though the runaway spending of the past two years was caused by the Democrats.
The debt ceiling is the symptom, not the cause. Republicans need to fight the causes of the need to raise the debt ceiling, and on those issues the public will back Republicans.