11.30.12 4:00 PM ET
Much Ado about the Debt Ceiling
Brian Beutler introduces Speaker Boehner's strongest bit of leverage in the fiscal cliff discussions:
The debt limit hike isn’t actually a variable in the budget math concentrating Democratic and Republican minds ahead of 2013. But when Congress raises it and in what context has huge implications for the ultimate shape of the tax and safety net reforms the parties settle upon.
Ignore the need to raise the debt ceiling for now, and Democrats have all of the near-term leverage. If Republicans don’t agree to increase tax rates on wealthy people, everyone’s taxes will increase significantly automatically, and they’ll have to cut middle-income taxes — but not upper-income taxes — retroactively.
But, as Senate Majority Harry Reid (D-NV) and others have noted, that means Republicans could turn right around and demand huge concessions from Democrats in exchange for raising the debt ceiling. If that happens, the White House has indicated it will call Boehner’s bluff. Force him to raise the debt limit cleanly, or tank the U.S. and global economies. But if they lacked the nerve, Boehner could walk away with another huge pot of concessions from Democrats.
Meanwhile, The Atlantic's Derek Thompson proposes eliminating the debt ceiling altogether.
I won't go nearly that far, but there should be a word of caution for conservatives. We claim to be the party of the economy and the middle class, the party of economic certainty, and the party that stays out of the way of "job creators."
That goes out the window when we permit government shutdowns and create immense uncertainty for entrepreneurs and consumers alike.
Negotiate like hell (or perhaps madmen), but at the end of the day, we're fighting to improve peoples' lives. Wreaking havock by waging ideological warfare is neither the way to win elections nor something our party should desire.