Republicans Let the Hostage Go
Just as they did in 2011, Republicans have been threatening to take the entire economy hostage in order to extract trillions of dollars in cuts to Social Security, Medicare, Medicaid, and other programs that Americans depend on each day. As we recently discussed, the result of taking the debt ceiling hostage in 2011 were horrendous. This is why the president has made it very clear that he won’t play this game again.
Last month, Republicans caved on their main principle on taxes: no tax increases for anyone, ever. And today they caved on their principle on the debt limit: no increase without an equivalent amount of spending cuts.
(They are also proposing something unconstitutional regarding Congressional pay and are making noise about the non-binding budget resolution that has little impact on spending, but the most important thing is their surrender on the principle of debt limit-as-hostage.)
The markets reacted favorably to this news, with the S&P 500 index climbing to a five-year high.
Republicans can remove remaining uncertainty by agreeing to a long-term extension of the debt ceiling, rather than the 3-month extension they floated today. As the president recently said, we can’t keep “lurching from crisis to crisis to crisis,” so Congress needs to do its job and make sure the bills it racked up are paid for the foreseeable future, not just the next three months.
BOTTOM LINE: This moment of sanity is good news for everyone, as everyone would suffer if Republicans forced a catastrophic default on our obligations. Now it’s time for Republicans to come to the table and agree to a balanced approach to deficit reduction that both protects and strengthens key programs and includes substantial new revenues.