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NRO’s eye on debt and deficits . . . by Kevin D. Williamson.

Should Republicans Raise the Debt Ceiling?



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I am not at all convinced that congressional Republicans are serious about refusing to raise the debt ceiling, but I am pleased that Mike Lee and others are getting ready to make an almighty stink about it. As somebody famous once said, elections matter — and the Democrats, along with a few lukewarm Republicans, are about to get their first real experience of what Americans sent to Congress in November.

Advice to Republicans: You had better hold out for some real spending cuts.

You can already see the outlines of a deal shaping up in Washington, one in which Republicans give in on the debt ceiling in exchange for Democrats’ agreeing to extension of all the Bush tax cuts. That’s a bad deal for Republicans, and for anybody else who cares about fiscal discipline: It’s a bad deal for Republicans because, unless they do something stupid, they’re going to get their way on the Bush tax cuts, regardless. Nobody wants to raise taxes right now, and it is unlikely that freshly shellacked congressional Democrats will fight hard for a tax hike on their donors at just this moment. If the tax cuts are to be extended, then Republicans should insist that they be written into regular law  instead of coming up for renewal every few years, and then impose compensatory spending cuts to zero out the deficit impact. (My more enthusiastic supply-side friends will not be surprised that I do not think that the government should bother accounting for growth effects of  the lower tax rates; the effects are real, but they aren’t reliably predictable, and if we leave them out of the calculation then that extra revenue is gravy — and it can be put toward further deficit and debt reduction.)

My best guess is that the debt ceiling is going up. Nobody reasonably expects a Republican House to be able to prevail upon a Democratic Senate and President Obama to balance the budget today. But Republicans can — and must — insist on a real deficit-reduction program that is very largely focused  on spending cuts rather than tax hikes, one that has some real teeth on the enforcement end of things. The timeline doesn’t have to be tomorrow, but it had better not have a 20-year grace period, either: Real cuts should start kicking in right now, and the deficit should be significantly reduced within five years and radically reduced within ten.

Both politically and economically, I still think the Simpson-Bowles proposal is the best starting  point. House Republicans can and should remind voters every day that the deficit-commission chairmen appointed by President Obama have recommended an array of spending cuts, and then get to work. They can pass the cuts as a package or they can force them through one at a time, but get going now: The fact that these are Obama-appointed chairmen is politically powerful at this moment, but if the full panel waters down its recommendations, that will take away some of the fire. Now is the time to move the ball forward.

And, speaking of Simpson-Bowles and the Bush tax cuts, I much prefer a Simpson-Bowles tax system (no deductions, top rate of 23 percent) to the Bush tax regime (crazy complicated deductions, top rate 35 percent). So, House Republicans could say, “Hey, look, we’re offering you jokers a bipartisan olive branch: We’ll drop the whole argument about the Bush tax cuts if we can go straight to implementing the bipartisan Simpson-Bowles program, for which we thank the chairmen and President Obama, who appointed them.” No, Simpson-Bowles is not perfect: But passing it does not preclude passing additional spending cuts down the line or additional reforms of our tax system. And if you want to get something in exchange for raising the debt ceiling, a program that actually lowers the deficit would be appropriate. 

Why now? Why move so aggressively? Here is one reason: We are not out of the fiscal woods yet, by a long shot, and the Greco-Irish disease is going to make a showing in California, Illinois, New Jersey, and elsewhere. We had better have a real plan for controlling the national debt in place before we have to deal with the coming state meltdowns.

– Kevin D. Williamson is deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, to be published in January.


Tags: Debt , Deficits , Fiscal Armageddon , General Shenanigans , Politics


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