The chatter coming from certain quarters in the political and financial communities predicting a collapse of the economy of the West if Congress and President Joe Biden can’t reach a deal on the debt ceiling seems like a bunch of hooey.
America has never defaulted on its debt obligations and probably never will. The people in charge of such things will find ways to make sure the bills that have to be paid so, at least technically, a default never occurs.
Then again, why take a chance?
There’s every reason to make a deal. The talk of default is a negotiating tactic on both sides. Biden keeps spending and doesn’t want to stop. He thinks he’s the new FDR when he’s really Boss Tweed reincarnated, using public funds to strengthen his party’s political machine.
The Republicans who want to get spending under control – and there are a lot fewer of them than there used to be – feel like they’re out of options. They want to take Biden’s credit card away but don’t have the votes to do it.
The Republicans who aren’t on board now are just waiting to mock the party’s congressional leadership if it caves on the debt ceiling to Biden and the Democrats. That’s left House Speaker Kevin McCarthy, R-Calif., and Senate Minority Leader Mitch McConnell, R-Ky., worried they’ll have to fight a two-front messaging war they can’t win.
What to do? Cynic that I am, it’s time to cast “principle” aside and do a deal. (RELATED: MICHAEL FAULKENDER: A Down Payment On Fiscal Sanity)
It’s what the people want. It’s why they send people to Washington. It’s what they expect them to do.
A deal that trades an increase in the debt limit for real cuts in spending like the one former GOP House Speaker John Boehner was able to force President Barack Obama to accept is what’s called for now.
Anything that leads to responsible fiscal reforms and spending reductions, even if it isn’t enough to get us out of the mess the lockdown spending created is still moving in the right rather than wrong direction. The imperfect is not the enemy of the good.
The downside of not doing a deal is that all the blame for whatever happens will be placed at the feet of the GOP, as The New York Times and CNN and MSNBC will helpfully explain.
Inflation, rising prices, a falling stock market, credit restrictions – even dogs and cats sleeping together and mass hysteria – will be blamed on Republican intransigence and extreme demands even if it’s Biden who won’t move an inch away from his insistence on a “clean” debt ceiling bill.
If default happens – and that’s still a big if even if there’s no deal – the taxpayers would get hit. Hard. The cost of additional debt service, which is already on the rise because of the Jimmy Carter-like inflation Biden’s economic policies have produced, will make it that much more difficult to get the budget anywhere close to balance.
Standing firm on the underlying principle of trading an increase in the debt limit for cuts in spending is the winning position. The details don’t matter so long as the overall objective is accomplished. This sets the Republicans up for messaging in the 2024 campaign cycle that they can be trusted to handle the nation’s economic business. The fight over the debt limit is just one battle in a long war that isn’t going to end anytime soon.
A former UPI senior political writer and U.S. News and World Report columnist, Peter Roff is a senior fellow at several public policy organizations including the Trans-Atlantic Leadership Network. Contact him at RoffColumns AT gmail.com. Follow him on Twitter and TruthSocial @TheRoffDraft.
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