A Win-Win on Raising the Debt Ceiling
In September, the nation will face the spectacle of yet another demand to raise or suspend the federal debt ceiling. There will likely be a demand for a "clean" debt limit increase by the President, Republican leadership and democratic rank and file. There will be an attempt by conservatives and fiscal hawks to block the debt limit increase.
Of course, the reality is, yet again, sound and fury will signify nothing.
Brinksmanship will fizzle out.
The debt ceiling will be raised or suspended and the trend of infinite debt spending will continue.
But what if we could do something different this time?
What if there were a win-win that could bring all of the usual factions together?
This chart hints at what it could be.
It imagines if an earlier "clean" debt ceiling hike, to which then-Senator Obama objected on March 16, 2006, was accompanied by passage of the congressional resolution needed to activate the Compact for a Balanced Budget; and followed by the states rapidly joining the Compact, proposing and ratifying its powerful Balanced Budget Amendment. The constitutional debt limit thereby established, at just over $9 trillion, would have likely avoided much of the $20 trillion dollar debt we currently face.
Over the following ten years, brinksmanship over debt limit increases would have been replaced by a deliberative bargaining process under the Compact's Amendment.
Specifically, instead of games of chicken, the President would have been required to designate spending priorities to protect the debt limit well in advance of running out of borrowing capacity; impounding any spending that would threaten to breach the debt limit months in advance of hitting the limit.
Instead of folding to the executive branch's inevitably superior bargaining position, Congress would have been able - with just simple majorities - to override the President's spending priorities and impoundments with their own.
These constitutionally-authorized negotiations would have been the foundation of finally reaching agreement on a real budget.
Any desired increase in the constitutional debt limit included in such a budget would then have had to secure the approval of an outside oversight authority - a majority of state legislatures, which would have brought the debate closer to the American people with much greater transparency.
And with supermajorities of Americans demanding a balanced budget for decades, it is very likely the Amendment's initial constitutional limit on more borrowing would have been held or at least any increase would have been moderated from what has otherwise been. Imagine if, instead of kibuki theater and the gnashing of teeth over ultimately meaningless debt limit disputes, the parties simply got down to brass tacks bargaining over the budget.
Imagine how much more rational spending priorities would have been if Washington, DC did not have the option of unilaterally raising its own debt limit.
Imagine the difference in our nation's history.
This is no longer a fantasy. We can still choose this path.
HCR73 - the Congressional Resolution needed to activate the Compact for a Balanced Budget - was filed last week. It only requires simple majorities to pass. It does not require Presidential signature. It should not be subject to filibuster. It should be very easy to pass alongside a clean debt limit increase.
A clean debt limit increase accompanied by the passage of HCR73 would present the win-win policy outcome that all sides have been looking for.
Its passage would provide the critical mass for the remaining states to join the Compact for a Balanced Budget.
Its passage would allow the President, leadership and the democratic rank and file to rightly contend that they are committed to fundamental fiscal reform despite supporting a debt limit increase.
The states would be empowered to deliver the enforcement mechanism to credibly commit both Congress and the President to achieving a Balanced Budget according to their longstanding 10 year plans; namely, the Compact's Balanced Budget Amendment.
The threat of an impending action by the states to impose the Compact's Balanced Budget Amendment on Washington, DC, would enable conservatives and fiscal hawks to hold every federal representative's feet to the fire on budgetary discipline and priorities.
And if the states accept the leadership position they have been demanding for so long in advancing various past Balanced Budget Amendment efforts, passage of HCR73 should embolden them to quickly consummate the Compact for a Balanced Budget, resulting in a ratified Balanced Budget Amendment before it is too late.
10 years from now, our national debt would likely be half as much as it would have otherwise been. Instead of being $40 trillion dollars in debt (or more) and reneging on social security obligations, among other promises, the federal government would have made the hard choices that must be made when the can can't be kicked (and the bill sent) to the next generation.
Just like things could have been, if we had a time machine to bring the Balanced Budget Compact back to 2006, when then-Senator Obama opposed a debt limit increase above $8.6 trillion.