For some time, I've been arguing that we should not just extend the debt ceiling but get rid of it altogether. It's a weird historical anomaly that serves no practical purpose other than allowing the opposition party, should it be sufficiently reckless, to threaten global economic catastrophe if it doesn't get its way. I assumed that your average Washington Democrat would share this view, but now I'm beginning to think that if you're someone like Nancy Pelosi or Barack Obama, the debt ceiling is actually quite helpful, and you'd be sorry to see it go.
Because here's what keeps happening: The debt ceiling approaches. Republicans begin making threats to torpedo the country's economy by not raising it, and thereby sending the United States government into default, if their demands aren't met. We then have a couple of weeks of debate, disagreement, and hand-wringing. Republican infighting grows more intense, and their reputation as a bunch of radicals who are willing to burn down the country to serve their extreme ideology is reinforced. At the end of it, the Republicans cave, the ceiling is raised for some period, and we do it all again in a few months.
And here we go again. The debt ceiling is going to have to be raised in the next month or so. Since the deficit is now at its lowest point since Barack Obama took office, it's hard for Republicans to say that slashing the budget is so urgent that it justifies threatening to send America off an economic cliff. So what will they demand as their price for assenting to a debt ceiling increase? The answer is...they can't decide. Yesterday, the House leadership proposed that they demand either a repeal of the "risk corridor" provision in the Affordable Care Act, which protects against a "death spiral" in the individual insurance market (here's a good explainer on that), or approval of the Keystone pipeline. As Jonathan Chait pointed out, "Republicans have decided that one of these policy demands is so vital that they can insist its fulfillment justifies the threat of global economic calamity. They're just not sure yet which one." But it turned out that they couldn't even unite around one of those two things, and that proposal of the leadership's is now dead.
So here's where we are. The Republican position is that something or other, let's call it the Policy Change To Be Named Later, is so urgent, so pressing, so essential to the future of this great nation that if they don't get it, whatever it turns out to be, they will force the government into default. And as soon as they figure out what the PCTBNL is, they'll let us know.
Meanwhile, the Democrats' position is simple: the debt ceiling needs to be raised, without conditions. Period. And that's just what's going to happen. There'll be some hemming and hawing between now and then, but Democrats are going to win this, and Republicans are going to lose, and look like fools. Given that, if you were Barack Obama, wouldn't you be perfectly happy to go through this routine a few more times?
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