In our editorial today, we recommend the House taking up a package of spending cuts and pairing it with an increase to the debt limit. This seems like a no-brainer. It would give Republicans the initiative and effectively say to the White House and the Senate Democrats — “We’ve dealt responsibly with the debt limit and with the underlying debt, now over to you.”
Despite the panic of the last 24 hours, it’s not true that Obama has all the leverage in the debt-limit debate. It looks to me that he would like a deal with some spending cuts to try to repair his fiscal credentials. Certainly, he and Harry Reid would be put in a very awkward spot after the talk of a catastrophe coming August 2 if they have no counter at all to action in the House to raise the debt limit.
Now, it’s unlikely the House package would ultimately be adopted in its entirety. Normally in such circumstances, House members fear getting “BTU’ed” — putting themselves on record for politically difficult measures that won’t ultimately happen. But this shouldn’t be a problem since the House Republicans already voted for the Ryan plan. The Ryan budget cuts about $6 trillion total over 10 years, and about $2 trillion from non-security discretionary — and that leaves the longer-term Medicare reforms aside. It should be easy just to work from the discretionary part of what they already voted for and pair it with a comparable increase in the debt limit for a 1:1 ratio of spending cuts to debt increase. Or, they could be more ambitious and make it a 2:1 or 3:1 package. Whatever, but there should be lots of options.
Instead, at the moment, there are no options. By all accounts, several dozen Republicans are opposed to voting for any increase in the debt limit at all. This means Republicans don’t have 218 for anything. A friend of mine jokes, “I don’t think they even have 200 for anything.” This is why the only viable scenario right now for getting something through the House is a deal with the White House that most Republicans and a contingent of Democrats can support. Since that seems unlikely, it looks like we’re going to tick steadily down to August 2.
It may take some sort of disruption in the markets or in the operations of government to shake something lose. If that’s where we end up, who do you think will be blamed? If Republicans do take the blame, they’ll eventually crack and vote for a debt-limit increase in the worst possible circumstances. It’d be much better if they took the initiative now in a bid to avoid ending up in that fix or, if it comes to that, to place the blame on the Democrats. But they’re frozen in place by their own divisions.