Paul Revere is in his 20s, and is concerned about the impact of the growing national debt on his generation. Not much younger than when his namesake made his historic ride, he works in the wake of a tea party to warn his fellow patriots of impending doom - unless they exercise the courage to act now. He will be posting regularly at ConservativeHome on spending issues to encourage his fellow patriots to find that courage.
With America’s national debt approaching $14.3 trillion, and requiring a hike of the debt ceiling to prevent a defaulting of America’s debt, the political parties and casts of characters are taking up positions for potentially a major showdown in late February/early March. While the opinions vary, the Chairman of the White House Council of Economic Advisers, Austin Goolsbee, laid down the gauntlet to Republicans a few weeks ago. According to Goolsbee, playing chicken with the debt ceiling is “insane.” This sets a rather strong challenge to Republicans, who I am certain will be portrayed as irresponsible by liberal media sources if they don’t kowtow to President Obama’s wishes.
Both parties are responsible for the skyrocketing national debt. Democrats created Social Security, Medicare and Mediciad, the major drivers of our national debt in the long run. Republicans refused to hold the Defense Department to the same efficiency standards they claim to want to hold other departments to, and created an unaffordable drug program in 2003. Both parties have allowed corruption and incompetence to reign in Iraq and Afghanistan, conflicts that will cost America trillions in the long run. Both parties also supported TARP, a major bailout of GMC and the first stimulus under Bush, and the Democrats pushed the 2009 stimulus through with some Republican support.
It is with this backdrop that the debate over raising the debt ceiling arrives. With the gauntlet thrown by Goolsbee, Republicans have to respond with decisiveness and intellectual honesty. With three options available— raise the debt ceiling with no cuts; compromise on the ceiling rise with spending cuts; or cut so much raising the debt ceiling is merely an academic question— Republicans have to sit down and make some real tough decisions about the future of the party, its members, and the nation as a whole. Below is my take on the three options available to Republicans:
1. Raise the debt ceiling with no spending cuts - otherwise known as political suicide and more signs they are not serious about spending. If they do this, both parties will likely be severely diminished in power by 2015 as our spending trajectory gets steeper. I predict that at a minimum a strong third party will come to fruition, and at the other end of the spectrum rebellion and/or a fiscal implosion will happen.
2. Compromise with Democrats - say that they will raise the debt ceiling if $500 billion (slightly under 25% of the rest of the fiscal year’s budget) is cut out of the budget this year and get a public promise out of the president and the Congressional Democratic leadership to balance the budget by the time October 2012 rolls around. Senators Coburn and Paul (R-KY) have offered their votes only if $300 billion is cut from the budget and “a balanced budget rule” is attached to raising the ceiling, respectively. While neither of these options is good enough, they are responsible steps in the right direction, and Paul’s recent release of $500 billion in cuts is reason for some optimism. Unlike some Republicans who oppose raising the debt ceiling out of the same partisan reasoning then-Senator Obama (D-IL) and then-Senate Minority Leader Reid (D-NV) used in 2006 against raising the debt ceiling then, these senators are acting like the responsible leaders we the people hope all politicians will be. With just the spending cuts and entitlement and defense reforms I have offered cutting $500 billion this year and balancing the budget by 2012 is a very doable pair of goals, and I think Republicans should use them to the advantage of the party and the nation.
3. Don't raise the debt ceiling at all - which means the nation defaults OR Democrats are forced to work with Republicans to cut enough money out of the budget to not default for the rest of the fiscal year. Given that we will put $300 billion into the debt in three months, this means we would have to cut at least $800 billion to have a tiny amount of breathing room until the end of Fiscal Year 2011s.
I'm torn on the last two options. I like #3 best, but it would simply be a political impossibility. Cutting 40% of the rest of the year’s budget is something that cannot work with so many politicians more willing to be re-elected than help the country. I think #2 is the most workable option. Politically it gives Republicans breathing room public relations-wise with both moderates and the Tea Party. It also, most importantly, gives the nation some breathing room while its leadership and grassroots activists find ways to bring the scope of government at least to affordable levels, if not to the small size at which it belongs.
The flaw with #2 is the same one Peggy Noonan noted helped create the Tea Party Movement – compromise is usually more liberal than conservative. In this case, however, I think compromise works in the favor of Republicans, the conservative movement and America.