Republican leaders in Congress announced last week their willingness to raise the government’s debt ceiling, as long as deeper federal spending cuts are part of any future deal.
At least that’s the reason they gave in public. In private, there’s a good chance they’ve been weighing the pros and cons of being the guys in charge if the Grand Old Party goes down in flames.
A majority of Americans have grown increasingly weary of the stalemate in Washington, and while they see both Republicans and Democrats as culpable, most of the fingers are being pointed at the GOP.
There could be another reason Republicans are abandoning their almost theatrical indignation — they’re reading the same warnings we’ve been reading about the nation’s credit rating.
Fitch Ratings Ltd. warned last week that if the federal government’s ability to borrow money is in any way delayed by partisan bickering, the government’s credit rating would be downgraded — again.
Standard & Poor’s, one of the planet’s largest and most prestigious credit rating agencies, lowered the U.S. rating as a result of the debt-limit standoff between the Obama administration and House Republicans in 2011. Other major rating agencies didn’t follow Standard & Poor’s lead, but they’re threatening to if the childish political foot-dragging doesn’t stop.
President Obama and Congress don’t have much wiggle room on the debt-limit issue. If they can’t reach agreement in the next few weeks, the federal government will lose the ability to borrow money to pay its bills. If that happens, and the rating agencies further downgrade the U.S., politics will have served up a European-style economic crisis in our country.
And for no good reason, other than to protect political egos from excessive bruising and battering.
The cost of such partisan hubris can be staggering. After S&P’s downgrading of the U.S. rating in August 2011, European financial markets went into a tailspin. Europe watched as the president and Congress danced a maddening fandango, and lost faith in America’s ability to pay off its debts.
Some economists argue that a debt ceiling is not only unnecessary, it’s potentially harmful on a recurring basis. We believe that’s a faulty theory, just as it would be financially suicidal for a family to have unlimited credit and decide to borrow with no intention of paying off the debt. That’s a do-not-stop-at-go path to bankruptcy.
But lest we come off as blaming Republicans for this fiscal mess the nation is in, we need to emphasize that both parties share responsibility. Raising the debt ceiling makes sense only if the Obama administration and Congress, and that most certainly includes Democrats, agree to reduce unnecessary government spending.
Both parties may argue that their pet programs are already whittled to the bone financially, but we all know they’re not. If politicians would wake up to the facts of, say, Medicare fraud, the federal government could save hundreds of billions of dollars a year.
When we talk about reining in government spending, we’re referring to spending on things we don’t need to spend on. There isn’t enough space on this page to list every program in which tax dollars are wasted. And it wouldn’t take much effort for a bipartisan congressional commission to produce a list.
Another thing we’re fairly certain of is that House Speaker John Boehner doesn’t want to go down in history as the man in charge when the Republican Party committed a very public suicide. He’s doing his best to avoid that, but the far right wing of his party isn’t being particularly cooperative.
It’s going to get interesting in Washington.