Republican House leaders have announced plans to vote on a three-month debt limit increase, attached to a condition that Senate Democrats pass their first budget in four years or else go without pay. This debt limit increase is already being denounced by some conservatives as a retreat, but they would do well to view it as an opportunity to go on offense in a smarter way.
In the current political environment, Republicans will not get what they really want SEmD true entitlement reform SEmD not even in exchange for the debt limit. So in the meantime, it would at least be helpful to trade a modest increase in borrowing for a more responsible and meaningful system of budgeting. It's a good start to force Congress to pass a budget every year before spending taxpayers' money, but Republicans should go further by reforming both budgeting and borrowing.
Congress should change the way it raises the debt limit by making it part of the budget process each spring. This way, Congress will need to borrow money for each fiscal year before spending it SEmD the opposite of the current arrangement, under which Congress commits the money first, then borrows whatever it needs to meet its obligations.
Right now, Republicans find themselves in an intellectually difficult position, vulnerable to criticism that they are not letting Obama pay for spending that they, as members of Congress, already agreed to. After all, every budget that Republicans voted for last year called for new borrowing in fiscal 2013. After the "fiscal cliff" deal, the federal government is expected to collect only about $2.6 trillion in fiscal year 2013. Last year's House-passed budget, drafted by House Budget Committee Chairman Paul Ryan, R-Wis., would spend considerably more than that, at $3.53 trillion. So do budgets produced by the conservative Republican Study Committee and Sen. Pat Toomey, R-Pa. Even the stingiest budget of all, the one proposed by Sen. Rand Paul, R-Ky., would spend $3.1 trillion.
With the appropriate rule changes, Congress could produce a bicameral budget each year that raises the debt limit by whatever amount the Congressional Budget Office projects that spending will add to the debt during the upcoming fiscal year. Automatic adjustments could apply to unforeseen shortfalls in revenue, but a separate vote would be needed to accommodate policy changes that spend more money.
This would bring advantages for both sides. For Republicans, it would force Senate Democrats to start passing budgets again, and it would force Congress to live within the budgets it passes. For Democrats, this proposal would spare them both the threat of a government shutdown every few months (when each temporary spending bill expires) and take care of the debt limit issue early in the year, long before appropriations season.
Under this scenario, Congress would still maintain the power of the purse and the power to borrow, but it would also be giving the president the tools to pay off the bills it runs up. Moreover, it would strongly discourage members of Congress from larding up appropriations bills with spending that busts the budget, because a new debt ceiling vote would be required to accommodate the extra pork.
This proposal would not resolve the philosophical conflict between House Republicans who want to cut spending and Senate Democrats who would like bigger tax hikes than the fiscal cliff deal allowed. But each year, the House and Senate ultimately have to agree on spending levels anyway, as they do now through continuing resolutions. A reformed budget process would let Congress govern the nation and its own spending appetites in a more orderly way.