It’s Deja Vu All Over Again With Debt Ceiling Fight

“ Once the Democrats know that the debt ceiling will invariably be raised, they have no incentive to play ball. The end result will be another raw deal that is worse than doing nothing.”

There is much hullabaloo in the media about John Boehner’s shot across the bow in the upcoming battle over the debt ceiling this fall.  Specifically, Boehner warned that he “will again insist” on the” simple principle of cuts and reforms greater than the debt limit increase.”

The question is what Boehner means by insisting “again” on spending cuts greater than the debt ceiling increase.  Does he view the failed Budget Control Act (BCA), super committee, and sequester of defense spending as a success?  He has yet to denounce last year’s failure, so why should we look forward to a repeat performance?

The first step in remedying our debt ceiling strategy is to acknowledge the failures of the past.  When Republicans caved on raising the debt limit last year, we referred to the final Boehner proposal as a ground ball into a double play.  Not only did Boehner fail to secure any transformational downsizing of government in exchange for raising the debt ceiling, he actually stymied our leverage in future budget battles.  As we’ve noted, Mitch McConnell and House appropriators have already signaled that they will never cut one cent below the discretionary budget caps established in the BCA.  Hence, the BCA served only to lock in the record spending levels of the Obama-era.  The only real cuts that originated from that deal were the sequester cuts to the military that Boehner agrees we should now vitiate.  So how would he do things differently this time?

In retrospect, it would have been better to pass a clean increase of the debt ceiling and live another day to fight in future spending battles than to pass the BCA.  The BCA ruined our leverage for the next ten years as Democrats and Republicans alike refuse to spend below those statist levels.  Moreover, it has engendered a gratuitous schism in the conservative coalition by pitting spending hawks against defense hawks and forcing Republicans to go through the embarrassment of undoing their own scheme.  Finally, the deal failed to achieve the primary objectives of averting a credit downgrade and slowing the national debt.  The debt has increased another $1.3 trillion in the 9 ½ months since the debt ceiling was raised.  That’s about $5 billion per day.  After the hyped dollar-for-dollar cuts, there is not a single major program or agency that has been eliminated.


The irony is that the debt has increased so rapidly following last summer’s deal that we are already talking about the next debt ceiling battle.  Do we really want a repeat performance?

Going forward, there are only two options: A) Republicans can telegraph the message to Democrats that they will never raise the debt ceiling without prior passage of something similar to Cut, Cap, and Balance – and that they would be willing to go to the brink.  B) They admit that they are too scared to take this to the brink, and as such, agree to let Obama raise the debt ceiling.  There is no option C, which would repeat the mistakes of last year.  In other words, it is insane to tell the Democrats that you would never let the deadline pass, yet demand concession for the debt ceiling increase.  Once the Democrats know that the debt ceiling will invariably be raised, they have no incentive to play ball.  The end result will be another raw deal that is worse than doing nothing.  This has occurred time and again throughout every budget battle and it’s time we end this insanity.  We don’t need to hear the tough talk and bravado if there is no intent to carry through with it.

Boehner noted at his speech before the Peter G. Peterson Foundation Fiscal Summit that “we shouldn’t dread the debt limit. We should welcome it.”  He punctuated that belief by calling the debt ceiling “an action-forcing event in a town that has become infamous for inaction.”

Undoubtedly, the debt ceiling will provide us with yet another opportunity to expose the Democrats as the statist European-socialists who are apathetic to our debt crisis.  However, there are all sorts of actions; some are good and some are bad.  Grounding into a double play is worse than striking out.  Sadly, based on our painful experience from last year, inaction might be superior to the action that will evolve from the ranks of the consultant class of the Republican Party.


Cross-posted from The Madison Project


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