For all the talk of a coming “showdown” over raising the national debt ceiling, there is widespread bipartisan agreement that Congress must do so in order to stave off worldwide financial collapse.
Earlier this month, leading Republican Sen. Lindsey Graham (R-SC) explained the dire importance of increasing the debt ceiling to CNN: “Let me tell you what’s involved if we don’t lift the debt ceiling: financial collapse and calamity throughout the world. That’s not lost upon me.” House Budget Committee chairman Paul Ryan (R-WI) agreed, stating “Will the debt ceiling be raised? Does it have to be raised? Yes.” These comments were echoed by conservative commentators, who called opposition to raising the debt ceiling “silly” (Bill Kristol) and “suicidal” (George Will).
In most situations, such broad consensus results in congenial agreement about how to move forward. In Congress, however, members rarely pass up an opportunity to hold legislation hostage until their parochial interests are satisfied. For instance, Sen. Mary Landrieu (D-LA) recently put a unilateral hold on President Obama’s budget director nominee until the administration’s deepwater drilling moratorium was lifted.
Now, many Republicans are using the debt ceiling as a bargaining chip to extract draconian spending cuts, including slashing Social Security and other safety net programs. Watch it:
Despite pleas from across the political spectrum to stave off financial collapse by raising the debt ceiling, numerous other Republicans are demanding major concessions as well, including Speaker John Boehner (R-OH), House Majority Leader Eric Cantor (R-VA), Senate Minority Leader Mitch McConnell (R-KY), Sen. Orrin Hatch (R-UT), Sen. Mike Lee (R-UT), and Rep. Mike Pence (R-IN).
One final point bears consideration. Brinksmanship is a highly-effective tactic in congressional negotiations, and one that Republicans have employed successfully in the past. (Exhibit A: the two-year extension of all the Bush tax cuts. Not only did Republicans claim they would hold up middle class tax cuts if the rich didn’t also receive a break, but they were able to convince everyone this threat was credible.)
However, on the debt ceiling issue, the GOP’s brinksmanship position of opposing an increase lacks credibility. Many Republican leaders are fully admitting that the debt limit must be raised in order to stave off financial collapse. In doing so, they undercut the credibility of those Republicans who claim to oppose a debt ceiling increase unless they are given major spending cuts in return.
With a diminished GOP bargaining position, President Obama and congressional Democrats ought to stand firm. Matt Yglesias makes a similar point, arguing that “Barack Obama favors raising the debt ceiling. Key House Republicans such as Paul Ryan and John Boehner also favor raising the debt ceiling… [I]t would be foolish for Barack Obama to get sucked into any kind of negotiation over the debt limit.”
Felix Salmon makes the case for scrapping the debt ceiling altogether, calling it a “built-in systemic stupidity: the existence of the debt ceiling can cause lots of harm, while it does no good whatsoever.”