Ah, how fleeting good times can be.
Workplace demands quickly shove aside Christmas vacation memories. Morning and afternoon traffic jams fill the recently quiet streets. And we cant even exhale over the resolution of the fiscal cliff before the next congressionally manufactured crisis comes barreling up the calendar.
With the cliffs Dec. 31 deadline met, more or less, the country is now just seven weeks or so away from defaulting on its debt. The U.S. hit its debt ceiling of $16.394 trillion last week, and the Treasury Department is employing extraordinary measures to pay the bills until the end of February.
Its true that Congress under both parties and with the help of every president has raised the debt ceiling 79 times since 1960. But Republicans are now suggesting that there wont be an 80th hike without simultaneous spending cuts. That has gut appeal, no doubt, to citizens sick of the nation drowning in red ink. But it would be a fiscal disaster and, incidentally, political suicide.
Senate Minority Leader Mitch McConnell is among many Republicans who are threatening a government shutdown by tying the debt ceiling boost to spending cuts.
We simply cannot increase the nations borrowing limit without committing to long-overdue reforms to spending programs that are the very cause of our debt, McConnell said Sunday.
Two things are crystal clear: Spending must be cut. And the debt ceiling must be raised whether or not an agreement on spending cuts has been reached.
How can that be consistent? Future spending needs to be cut. Past spending, already approved by Congress, must be paid for, and thats what the debt ceiling hike would do.
If Congress fails to raise the ceiling, the United States defaults on its obligations. That would send financial markets plummeting, interest rates soaring and the economy reeling. The worlds leading economy will suffer a credit downgrade and be seen as a riskier bet than ever before.
The Bipartisan Policy Center says the 2011 debt ceiling showdown will cost the U.S. $18.9 billion in higher borrowing costs over 10 years. Actually failing to raise the ceiling would be far more expensive. So the deficit would be made worse, not better, by refusing to raise the debt ceiling.
None of this means Democrats can party like its 1999. Republicans are right (if maddeningly vague) that America has a spending problem. The last two years have seen an utter failure by President Obama and Congress to address that fact, culminating with a fiscal cliff solution that dodged it altogether. The cliff deal removed some uncertainty about tax rates but was not a serious step toward reducing deficits.
Many Democrats grudgingly acknowledge the need for spending cuts in the abstract. Republicans are much better about putting the topic on the public agenda. Rarely, though, has either side shown authentic interest in specific spending cuts in the trillions of dollars as part of a balanced and effective deficit-reduction package.
Heres a start: Cut U.S. defense spending, which dwarfs that of all our foes combined. Means-test Social Security. Raise the Medicare retirement age. And dont explode the countrys interest expense by defaulting on our debt.