United States Treasury officials are about to reach the country’s borrowing legal limit of $14.294 trillion. This limit, which is set by Congress, has been increased 10 times in the past decade. The White House wants it raised again. Many congressional Republicans are willing to go along, but not without major spending concessions. This fight will drag on for months into the summer, and maybe even into the fall. Just remember: This impasse is entirely the congressional Democrats’ fault.
No, the Democrats are not to blame for the entirety of our nation’s current $1.4 trillion budget deficit. President George Bush’s Medicare expansion, the wars in Afghanistan and Iraq, and steadily increasing federal expenditures on hundreds of overlapping programs all contributed to that number.
But the Democrats are to blame for not raising the debt ceiling when they had the chance, as was the case this past December during the lame duck session of the 111th Congress in which Democrats controlled both chambers of Congress and the White House. They knew then, just as well as they do now, that the debt limit would be reached sometime this spring. They could have said no then or made major spending cuts while raising the limit. But they didn’t.
Asked why, Majority Leader Harry Reid told Talking Points Memo: “I want the Republicans to have some buy-in on the debt. They’re going to have a majority in the House. I think they should have some kind of a buy-in on the debt.”
But did Reid really believe that the Republican “buy-in” would be free? Since he purposefully chose to delay the vote for purely political reasons, should he not also expect to pay a price? But what price would be fair?
What should the Republicans ask for in exchange for their votes to raise the debt ceiling? Sen. Chuck Schumer, D-N.Y., may have inadvertently stumbled upon a pricing mechanism while criticizing House Budget Committee Chairman Paul Ryan’s Path to Prosperity budget plan.
Trying to cutely identify Republican hypocrisy, Schumer noted that the Ryan plan includes a $23 trillion debt limit by 2021. But Republicans might just want to take this observation as an opening offer: Congress raises the debt limit $9 trillion and Obama signs all $6 trillion of Ryan’s spending cuts into law. A GOP counteroffer would, of course, use different numbers, but that’s called “negotiation.”
Schumer’s comment raises another question: How much does the White House want the debt limit raised? Treasury Secretary Timothy Geithner has sent two letters to Congress asking them to raise the debt limit. Curiously, neither letter said specifically how much Obama wants the debt ceiling raised. That number matters.
According to the Congressional Research Service, absent the debt limit, Treasury will have to borrow another $738 billion for the remainder of this fiscal year. And according to the Congressional Budget Office, Obama has requested another $1 trillion-plus in deficit spending next year.
Now there is no way Obama wants to have another debt limit vote the September before his re-election, so let’s tack on another $500 billion just to be safe. That means that the White House will likely be asking for about a $2.2 trillion raise to the existing $14.294 trillion limit.
So the basic parameters of a deal are coming into place: no spending cuts, no debt limit increase. Or $6 trillion in spending cuts, $9 trillion debt limit increase. $1.4 trillion in cuts, $2.2 trillion debt increase. The numbers are infinitely changeable.
The key will be getting the spending cuts certified by the CBO. They have to be real cuts. Our nation’s bottom line cannot afford another $38.5 billion in announced cuts that turn out to be worth only $352 million when scored by the CBO.
Conn Carroll is a senior editorial writer for The Washington Examiner. He can be reached at [email protected].
