THE DEBT-LIMIT SHOWDOWN LOOMS…. Fairly early on in the next Congress, lawmakers are going to have to approve yet another raise in the federal debt limit. At least, they should, if they hope to avoid an enormous catastrophe.
The problem, of course, is that quite a few far-right Republicans, especially those poised to win tomorrow, have no intention of doing what’s necessary. Bruce Bartlett noted the other day that it’s a disaster just waiting to happen.
I hope I am wrong, but I don’t see any prospect of meaningful action by a Republican Congress that would reduce the deficit, and much reason to think it will get worse if they have their way by enacting massive new tax cuts while protecting Medicare from cuts. And as I have previously warned, I am very fearful that it will be impossible to raise the debt limit, which would bring about a default and real, honest-to-God bankruptcy — something many Tea Party-types have openly called for in an insane belief that this will somehow or other impose fiscal discipline on out-of-control government spending without forcing them to vote either for spending cuts or tax increases.
When we talk about this crop of Republicans being absolutely stark raving mad, the debt-limit issue offers a terrific example. For years, responsible officials in both parties have recognized, particularly in times of war and/or economic crises, that extending the debt limit is a routine step necessary to keep America paying its bills.
But today’s GOP is another animal entirely. Republican National Committee Chairman Michael Steele told CNN yesterday, “We are not going to compromise on raising more debt. We are not going to compromise on raising the debt ceiling.” Republican candidates have been saying the same thing lately.
Just to be perfectly clear here, if Republicans retake the majority and block an effort to raise the debt limit, this tells the world that the United States isn’t in a position to repay its debts. We’re talking about an America in default. The practical effects could prove catastrophic to the global economy — that’s not hyperbole; that’s just reality.
I assume the vast majority of voters have no idea that this is coming, and that GOP recklessness on the debt limit could lead to a genuinely horrifying calamity. On the contrary, attack ads this season have been targeting Democrats for their routine votes increasing the debt limit — suggesting to voters that raising the limit is somehow scandalous and wrong.
Next year is likely to be ugly, but my sense is a lot of folks may not appreciate just how ugly it might get.