New York Times Editorial: A Debt Crisis Averted, for Now
In an unusual recognition of reality, House Republicans backed away on Wednesday from a chaotic default crisis and dropped their ruinous demand that spending be cut on an equal basis with a rise in the debt ceiling. On a vote of 285 to 144, the House agreed to suspend the debt ceiling for three months, adding the puerile condition that the Senate’s pay should be delayed until it passes a budget. The Senate majority leader, Harry Reid, said the extension would pass his chamber and promised to come up with a budget, four years late.
For the moment, at least, the vote vindicates President Obama’s strategy not to negotiate in any way over the debt ceiling. After the debacle of the 2011 debt crisis, which damaged the nation’s credit rating and its standing in the world of global finance, Speaker John Boehner knew that his demand for equal cuts in spending was no longer sustainable. If the hostage that Republicans wanted to take — the economy of the United States — couldn’t be used as a bargaining chip, it might as well be released.
Nonetheless, Nancy Pelosi, the Democratic leader, was right to call the measure “a gimmick unworthy of the fiscal and economic challenges that we face.” Postponing a crisis for 90 days does nothing to reassure markets, or businesses, or ordinary bondholders worried about their investments. It does nothing to inspire confidence in voters that their elected officials are grappling with the budget in a serious way, even if, in the end, Republicans are quietly planning on raising the debt ceiling anyway as part of further spending negotiations. (The stopgap resolution that currently pays for the government runs out at the end of March, and if Republicans think they can use the debt ceiling as a cudgel in that fight, they will find a solid wall of opposition.)
Wednesday’s bill doesn’t even raise the ceiling; it simply suspends its enforcement, showing how meaningless the mechanism is. Now that it is clear that the ceiling can be easily eliminated, both parties should agree to do so, averting not just this crisis but all those in the future.
The issue will have to be revisited in May, but the bill at least moves the budget debate closer to where it should be: the annual appropriations process. Let each chamber put its policy priorities on the table for public examination and then hash out the differences in the full glare of the C-Span cameras.
If the House actually wants to put forth a balanced budget over the next 10 years, as Mr. Boehner vowed to do on Wednesday, let the public see what that really means: unimaginable cuts and changes to Medicare and Medicaid, and the elimination of scores of popular and vital programs that benefit both the poor and the middle class. Up to now, Republicans have been understandably wary of specifying how that would be done without raising taxes. Mitt Romney wouldn’t do it, and even Representative Paul Ryan’s budgets up to now wouldn’t balance the budget until 2040.
Similarly, the Senate should finally go on the record with its own budget, one that combines further tax increases on the wealthy, investments in education, energy and public works, and sensible spending cuts. (It should have done so for the last four years, but too many Democrats were afraid of publicly agreeing with Mr. Obama’s proposals.) Despite the grandstanding coming from the House, Mr. Reid’s agreement to do so on Wednesday had nothing to do with threat of missed paychecks and everything to do with correctly reading the public mood.
Last year’s election showed where voters stand in this debate. They want deficits reduced in a balanced way, without irresponsible reductions in the role of government. Dropping extortionate demands for cuts is a good first step for the House, but it still has a long way to go.