Saturday, July 30, 2011
The Path Forward on the Debt Limit
I have a new piece up on National Review Online making the case for how the debate over the debt limit ought to proceed now, in the wake of the House passage of Speaker Boehner's plan. Here's an excerpt:
It’s been apparent for days now that Senator Reid and his Democratic colleagues aren’t going to simply pass the Boehner plan as-is, especially now that it includes the balanced-budget-amendment requirement. To get this bill through the Senate and to the president’s desk, the GOP is going to have to give the Democratssomething. And that something is almost certainly what the president has said is his bottom-line demand at this late hour: an assurance that there will not be another debt-limit showdown before the November 2012 election. That could be accomplished by dropping the balanced-budget-amendment requirement and substituting for it a modified version of the McConnell proposal from a few weeks ago. Under that formulation, the president could unilaterally increase the debt limit next spring if the “super committee” set up by the Boehner plan does not produce another $1.6 trillion or so in deficit reduction. Republicans would have the opportunity to vote against this second debt-limit increase, but they would need a two-thirds majority to override the inevitable presidential veto.
Many House Republicans will be very upset if this is the compromise that comes out of the Senate and goes back to the House for another vote before Tuesday. But they shouldn’t be. Because, even with such a compromise in the final legislation, the bill would represent a significant strategic victory for the GOP. The president would be denied what he wanted most out of this process — which is GOP acquiescence to a massive tax hike. All of the deficit reduction would come from spending cuts. There would be no “grand bargain” for Obama to tout going into 2012, and no tacit approval of Obamacare from GOP agreement to minimalist entitlement “reforms.” Most especially, the GOP would be seen as acting responsibly to defuse the potential for turmoil and chaos post–August 2.
Some in the GOP may lament that giving the president this out will take the pressure off the “super committee” to actually produce another round of real deficit reduction. That shouldn’t be a concern. Indeed, it should be a relief to the GOP if the “super committee” is rendered toothless — because nothing good will ever come of it. With this president in the Oval Office, there’s no chance that genuine entitlement reform will get enacted, as the Bowles-Simpson commission demonstrated (Obamacare was left entirely in place in the commission’s plan). It is more likely that a disaster would ensue when one wavering Republican on the “super committee” agreed to a “grand bargain” along the lines of what the president was pushing in June and July. That would force both the House and the Senate to vote, up or down, on the “super committee” recommendations, meaning there would be a very real chance that a massive tax hike would pass with very little on the entitlement side in return.
You can read the whole piece here.