As the deadline approaches, everything’s on the table
He couldn’t speak much more emphatically: “Congress consistently brings the government to the edge of default before facing its responsibility. This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets, and the federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility — two things that set us apart from much of the world.”
I sounds like something President Barack Obama may have said Saturday in his weekly radio address.
But the quote is almost a quarter-century old; it belongs to former President Ronald Reagan who said it during his weekly radio address in September 1987.
One must wonder, if Reagan was appalled by the brinksmanship of 1987, what would his reaction be today, when the Treasury Department has been juggling its books for three months to avoid default and is fast running out of options.
The political brinksmanship has risen from annoying and counterproductive to alarming and potentially destructive.
House Speaker John Boehner, R-Ohio, feigns shock that time is running out and proposes a short-term solution of obvious political benefit to his party — then accuses the president of putting politics above country by not accepting whatever Boehner offers.
“I would prefer to have a bipartisan approach to solve this problem. If that is not possible, I and my Republican colleagues in the House are prepared to move on our own,” said Boehner. Throwing down that gauntlet seems to invite unilateral action from the other side.
While Democrats have a majority in the Senate, Republicans have the numbers to block action there with a filibuster — and arcane Senate rules allow even one member to bring the body to a stop. That leaves only the president in a position to go head to head with Boehner, and the only way he could do that is by invoking the 14th Amendment solution. Section 4 of that amendment reads: “The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion ... shall not be questioned.” While the amendment was written in the wake of the Civil War, there are those who argue that the president could declare the artificial debt ceiling now being argued over in Congress moot. It would be a challenge for Supreme Court justices, especially those given to originalist thinking, to find the president wrong.
Obama has said as recently as Friday that he’s not interested in invoking the 14th Amendment, and he shouldn’t have to.
If Congress had been more serious about addressing the debt over the last year, these last-minute histrionics wouldn’t be necessary.
The bipartisan National Commission on Fiscal Responsibility and Reform provided Congress with a blueprint for addressing the long-term fiscal challenges of the nation. The commission recognized that the U.S. debt problem is not all about spending or all about taxing. It is a combination.
The budget deficits that have been adding yearly to the national debt for a generation reflect a dual reality: Spending as a share of Gross Domestic Product has been increasing while tax revenue as a share of GDP has been falling. It doesn’t take a rocket scientist to see that those two chronic conditions are going to produce a national debt that grows as a percentage of GDP.
The commission’s recommendations included both spending cuts and tax increases; Democrats refused to embrace the former, Republicans the latter. In Greece, when a similar though more draconian recommendation was made, people took to the streets. In the United States, Congress simply shrugged. And now, we are where we are.
Some level of cuts in spending and increases in revenue are going to be necessary to break the pattern of deficit spending, and neither side gets to declare one or the other off the table.