Nothing like a debt-ceiling brawl to raise the public’s anxiety levels. The Republican threat two summers ago to let America default on its borrowing helped lower America’s credit rating and sent consumer confidence back into intensive care. The people were not amused.
Consumer confidence dove again this month, as shoppers feared a jump over the “fiscal cliff” would undo their economic gains. We refer to the deep spending cuts and tax hikes that Republicans agreed to as a condition of their not sending the United States into default.
As the parties wrestle over these numbers, which would pull massive amounts of money out of a still-delicate economy, Republicans insist on bringing in the brass knuckles of another debt-ceiling fight. They should desist for America’s sake, and for theirs.
If the country careens over the so-called fiscal cliff, most Americans are prepared to blame Republicans, according to polls. A weak economy, or any economy, is no time to start playing games with the full faith and credit of the United States.
Since 1960, Congress has raised the debt ceiling 78 times, 49 of them under Republican presidents. The government should hit its $16.4 trillion borrowing limit sometime before New Year’s Eve. With the fiscal cliff weighing heavy, can we skip a traumatic debate over the debt ceiling?
The Grand Old Party risks reversing progress on rebuilding trust that it can do sound fiscal policy. Republican House members had wisely authorized Speaker John Boehner, a dealmaker, to actually speak for them in budget talks. Meanwhile, more Republican leaders are suggesting that additional tax revenues – even possibly, maybe, higher marginal income tax rates for the rich – should go on the table.
Also, tea party militant Jim DeMint is leaving the Senate for the plush Heritage Foundation, where the South Carolina Republican will be making noise, rather than laws. Good for his heirs, good for the party, good for the country. Given all these positive developments, it makes no sense for Republicans to resume thinking the unthinkable out loud.
That’s why, when Obama started warning Republicans not to play debt-ceiling chicken, I thought it was all politics. They had no intention of trying that stunt again, did they?
Well, old habits, including bad ones, die hard. Obama proposed to make raising the federal debt limit an automatic thing, thus lifting one terrifying possibility off our shoulders, and Republicans said no.
Senate Minority Leader Mitch McConnell held that reassuring the world that America would not default on its debt is “a power grab” by the president.
“It gives the president of the United States unilateral power to raise the limit on the federal credit card, the so-called debt ceiling, whenever he wants, for as much as he wants,” the Kentucky Republican said, with Boehner nodding.
Let the jury note that the numbers on the federal credit card were put there by Congress. If McConnell and Boehner don’t like that number, and few people do, the way to lower it is to spend less and raise more revenues. It is not to imply that America might not pay back the money it’s already borrowed. The world’s markets, and MasterCard, frown on that sort of thing.
The unpopularity of this stance was reflected in Treasury Secretary Timothy Geithner’s blunt remark last week: “We are not prepared to have the American economy held hostage to periodic threats that Republicans will force our country to default on our obligations.”
With the fiscal cliff spooking an already stressed public, ending the reckless debt-ceiling debate would seem an act of mercy. Must we put a request not to blow up the American economy in writing?
• Froma Harrop is a member of the Providence (R.I.) editorial board.