History rhymes on debt ceiling
By Philip Wallach, - 09/16/13 11:00 AM ET
  
“History doesn’t repeat itself, but it does rhyme,” Mark Twain is supposed to have said.. The sound of our current debt-ceiling fight ought to be recognized as the recurrence of a particularly ugly and useless tone.



Contrary to claims widely circulated in our contemporary debate, attempting to restrain federal spending by threatening not to raise the debt ceiling is nothing new to American politics.  Our 2011 showdown was certainly an exceptionally bruising episode, but Republicans in the 112th Congress were hardly the bold innovators they are sometimes portrayed as. 

As far back as the 1950s, fiscal conservatives in Congress used the necessity of raising the debt ceiling as opportunities for political point-scoring.  Southern Democrat Harry Flood Byrd of Virginia, then the chairman of the Senate Budget Committee, championed the debt ceiling’s discipline against the “reckless” spending of the Eisenhower Administration.  Then, as now, the Treasury engaged in a variety of tricks to work around the ceiling when it was hard against it in 1953, 1957, and 1958. 

Of course, when push came to shove Congress raised the ceiling in each case.

If our political masters and commentariat can be forgiven for neglecting the political tactics of more than a half century ago, it is harder to understand why they have failed to recall more recent jockeying.  Congresses rejected debt ceiling increases during the administrations of Lyndon Johnson, Gerald Ford, Jimmy Carter, Ronald Reagan, and Bill Clinton, in many cases leading to funding disruptions.

The debt ceiling showdown from 1996 presents a rhyme especially suited to our own moment.  Republicans, determined to lower federal spending, said that the Democratic President could only have a higher debt ceiling if he agreed to significant cuts in programs dear to the Democratic base.  When they passed a law that would enact these changes, the President responded with a veto and a demand for a clean debt ceiling increase.

Comparing the pronouncements of then-Treasury Secretary Robert Rubin, President Clinton, and various congressional Republicans to their 2013 counterparts produces an eerie sense of déjà vu—they are often difficult to distinguish.  So, too, are the critical analyses from the press.  Then, as now, there were accusations of blackmail, pseudo-crisis, and political charades, and grave pronouncements about how American government would be irreparably harmed if the president negotiated in exchange for the necessary increase.

As the date when Treasury’s maneuvers would be exhausted approached, Rubin increasingly emphasized the possibility that social security checks would be missed.  Clinton said Republicans should “stop playing politics with America’s good name,” to which they responded with very short-term bills pushing off the day of reckoning for several months and taking steps to ensure that Social Security recipients would not be left in the lurch.  In response to Rubin’s shiftiness about the consequences of reaching various dates, some Republicans called for the Treasury Secretary’s impeachment.

Of course, when push came to shove Congress raised the ceiling.  In this case, Republicans won minimal concessions from the president, but saved face by dubbing the package the “Contract With America Advancement Act” and including in it the line-item veto—a bold proposal on which the president agreed with them entirely.

This ending is hardly the stuff of great poetry, but we should hope (and probably expect) our current showdown to follow a similar course, with the White House’s “no negotiating” position giving way to some minor concessions.

One might argue that the near-absence of this episode from our current debate is heartening: seventeen years from now, in 2030, there’s a good chance that the shenanigans of 2013 won’t seem much worth remembering.

In another way, however, the inability to absorb or retain the lessons of 1996 is quite depressing: rather than institutional learning, we have institutional forgetfulness enabling a recurrence of ugly motifs.  Though a new generation has come onto the political scene, it hardly seems too much to ask our current leaders to remember the lessons of the 104th Congress; John Boehner was the Republican Conference Chairman in the House at the time.  To his credit, then-Speaker Newt Gingrich (R-Ga.) seems to have drawn the right lesson from his experience, advising Republicans that the issue is a “dead loser” for them.

Repeating this dysfunctional process over and over, with the expectation that it will somehow deliver fiscal responsibility and low spending that would otherwise be unattainable, is lunacy.  Legislators should permanently replace the debt ceiling and turn their attention to achieving workable budget compromises through the regular order—which should itself be reformed if necessary.  If they instead insist on treating the debt ceiling as if it were a historical revelation, they have only themselves to blame when it delivers its predictable lack of results.

Wallach is a fellow in Governance Studies at the Brookings Institution and his current research focuses on institutional aspects of fiscal policy and regulation, including financial regulation and climate change policy, as well as the legal aspects of the recent financial crisis.





Read more: http://thehill.com/blogs/congress-blog/economy-a-budget/322231-history-rhymes-on-debt-ceiling#ixzz2f5bekoGb 
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Obamacare, the debt ceiling and GOP insanityBy Jonathan Capehart, Published: September 16 at 6:00 amE-mail the writer


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Speaker John Boehner, center, and House Majority Leader Eric Cantor. (J. Scott Applewhite/Associated Press)


A statistic in the latest Wall Street Journal-NBC News poll drives me nuts. It’s 44 percent. Here’s the question: “Do you think Congress should or should not raise the debt ceiling? If you don’t know enough to have an opinion, please just say so.” The 44 percent who said the nation’s borrowing limit should not be raised should have responded “I don’t know” — because then they’d be telling the truth.

Clearly, what I’m about to tell you cannot be said often enough. Raising the debt ceiling does not stop future spending. And not raising it is not the equivalent of cutting spending. Failure to raise the debt ceiling would turn the United States into a deadbeat. That’s because the money gained from raising it is needed to pay $16.7 trillion in bills racked up by Washington since the beginning of the republic. To do otherwise, to not pay the nation’s bills, would destroy the full faith and credit of the United States and take down the global economy with it.

That the electorate doesn’t understand the complexities of the debt ceiling isn’t surprising. What’s scary is that some members of Congress don’t either. A powerful chunk of the Republican caucus in the House is hell bent on forcing President Obama to defund or delay his health care law. These zealots have now voted an insane 41 times to kill Obamacare.


But that didn’t stop House Majority Leader Eric Cantor (R-Va.) fromproposing to tie raising the debt ceiling to a year-long delay in the implementation of Obamacare, some provisions of which start Jan. 1, including the health care exchanges for which enrollment begins Oct. 1. Cantor scuttled it after a revolt on the right and unified resistance from the left. Cantor and Speaker John Boehner (R-Ohio) know full well they are playing a dangerous game. That they continue to play it is further proof they live in fear of those who neither understand nor care that they don’t understand the implications of what they are doing.

Treasury Secretary Jack Lew informed Boehner last month that the nation would run out of borrowing authority to pay its bills “in the middle of October.” At that time, Lew pointed out, “Treasury would be left to fund the government with only the cash we have on hand on any given day. The cash balance at that time is currently forecasted to be approximately $50 billion.” In the world of federal finances, that’s pocket change.

Now, here’s the scary part. The venerable Bipartisan Policy Center estimates that the Treasury will run out of that $50 billion sometime between Oct. 18 and Nov. 5. That’s the “X date.” If we reach that point, all hell will break loose. The president would be in the politically perilous position of choosing who gets paid on time and who doesn’t.

“It’s time for the president’s party to show the courage to work with us to solve this problem,” Boehner told reporters on Thursday. It is long past time for the speaker to show the courage to stand up to the crazy wing of his own party. Destroying the full faith and credit of the United States while on a fool’s errand to defund Obamacare, the president’s signature legislative achievement, which was upheld by the Supreme Court, is not leadership. It’s surrender.

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