Republicans haven’t gone wobbly on the debt ceiling debate, but
in the House they are laying a trap for themselves that will leave
them holding the bag for any downgrade or default on America’s
sovereign debt.
President Obama, as he indicated Friday, still demands
that significant tax hikes be a part of any debt ceiling deal. But
as Senate Minority Leader Mitch McConnell said on Thursday,
“Republicans will not be reduced to being the tax
collectors for the Obama
economy … We
won’t be seduced into calling a bad deal a good one.” So far, so
good.
But there’s a lot of loose Republican talk — magnified a
hundredfold by the media — that we shouldn’t worry about a
default. That plays into Obama’s hand. He’s perfectly willing to
drive our economy into a downgrade or a default as long as he can
blame it on Republicans. Conservatives mustn’t position themselves
as fiscal “dead-enders.” They have to force Obama to avert these
disasters on their terms, and they can.
The threatened downgrade will make more costly all direct
U.S. borrowing immediately and indirect borrowing (such as
guaranteed mortgages) soon after. The interest we’ll have to pay on
government debt will rise — perhaps dramatically — adding tens or
hundreds of billions to the national debt. The value of the dollar
will be reduced by inflation causing accelerated borrowing and
increased unemployment. If there’s a default, even for a day, it
will wreak havoc in our economy for many years to come.
To all my friends among the House members, please take a
moment to think about how the public sees you. Don’t ask each other
or your political consultants. Ask some people back home. You’re
still seen as principled conservatives, but you’re flirting with
being labeled “bumblers.” You voted down a bill that would have
authorized Obama’s Libya adventure and — on the same day — voted
for another one that funded it. Have you made up your minds
yet?
You were elected to reduce the cost and size of
government. You’ve taken some significant votes on Obamacare and
the Ryan budget plan, but Obama and Senate Dems have prevented you
from really achieving anything. On the debt ceiling you have the
opportunity to do something significant that they can’t entirely
stop. But that’s not what you’re doing.
The “Cut, Cap and Balance” plan is almost precisely what I
warned against in
this column a week ago. I say “almost” because it’s not a
Democratic trap Republicans are falling into. It’s worse: a
self-inflicted wound.
“Cut, Cap and Balance” cuts only $111 billion in this
year’s spending — so small inside $14.3 trillion in debt as to be
ridiculous — and then promises caps on future spending and a
balanced budget constitutional amendment. But caps on future
spending are susceptible to future congressional spending hikes.
The BBA — as Sen. Jim DeMint (R-SC) said yesterday — may not be
ratified by the states for a decade. A balanced budget amendment is
a great idea, but it’s not going to do anything to help fix this
month’s debt ceiling crisis.
And then there’s more bumbling. After
listening to Republican Study Committee Chairman Rep. Jim Jordan
(R-Ohio) on Fox News Sunday yesterday, you would have
understood that the Cut, Cap and Balance bill actually includes a
balanced budget amendment. But it doesn’t. I
received a copy of the CCB legislation — HR-2560 — late Sunday
afternoon. It requires that a BBA has to be passed before a debt
ceiling increase, but it doesn’t include one.
You gotta be kidding me.
Why waste a critical week debating the need for a balanced
budget amendment that won’t be voted on and a cap on spending that
any future Congress can change? Why not spend those days working on
a plan the House can pass that will actually solve the debt ceiling
crisis?
You can do better, and you must. There’s a bill that you can
write and pass this week. It’s in three parts.
Part one is Sen. McConnell’s original plan to raise the
debt ceiling in three stages and force up to six votes on both the
debt ceiling increases and spending cuts, shifting the political
blame for increasing the national debt to Obama and congressional
Democrats. It’s brilliant but it doesn’t work without the other two
parts.
(McConnell’s “Plan B” isn’t a good idea. It proposes a
congressional commission that will be a vehicle for tax hikes, not
massive spending cuts.)
Part two would add to McConnell’s original plan specific
spending cuts — as a precondition to each increase in the debt
ceiling — in a ratio of $3 in cuts for every $1 in debt ceiling
increase. You know the list of programs that should be cut in
dozens of agencies. Some agencies shouldn’t just be cut: zero their
budgets out altogether. Obama wants another $400 billion in defense
cuts without basing that on what threats exist
now or are foreseeable in the next decade. Before a thorough
analysis is done, no further cuts should be made. How about
taking that amount — and more — from the Departments of
Education, Interior, Health and Human Services, Labor and such?
Part three is calling Obama’s bluff on entitlement
programs. In his Friday presser, Obama said he’d consider means
testing for Medicare and raising the Social Security retirement
age, knowing that his congressional pals will block any legislation
to accomplish those reforms. Both of those ideas are already in
law, but they’re so weak and time-stretched that they don’t do
anything to help in the debt crisis. Raise the Social Security
retirement age to 70 years immediately for everyone under 45 and
lower the income level for Medicare means testing from the current
$85,000 per year to half that. Let those under 45 choose to invest
their own money for retirement and opt out of Social
Security.
You need to act this week to reduce the cost of both
entitlement programs because you probably won’t get another chance
before November 2012. You certainly won’t get another chance before
August 2, because Moody’s and Standard and Poor’s may downgrade our
debt rating before the default date is reached.
Obama and congressional Dems (and their media cohort) will
panic if faced with this plan because it deals effectively with the
debt problem and shifts the burden to them if a downgrade or
default occurs because they won’t support it. If you draft this
bill and pass it this week, you’ll corner Barry into the short-term
deal with big spending cuts he now refuses. And you’ll make a huge
contribution to cutting the size and cost of government, which is
the mandate you received from America last November.
If you try to pass “Cut, Cap and Balance,” you’ll fail.
You’ll strengthen Obama’s hand and take the blame for any downgrade
or default.
Stop wasting time, ladies and gents. Get serious, and get
it done. People want results, not an elegantly packaged plan that
never gets off the drawing boards. Voters may not give you a second
chance, and right now you don’t deserve one.
