With just one week to go before the August 2 deadline for raising the nation's debt ceiling, the fault line between House Republicans and President Obama and the Democrats appears to center on whether Congress should allow enough borrowing to cover the government's expenses until early 2013 or whether it should agree to a lesser amount that will force another vote in six months or so. House Speaker John Boehner is the chief proponent of the two-step solution, and he used some pretty harsh words on "Fox News Sunday" to criticize President Obama's opposition to the idea: "I know the president's worried about his next election. But my God, shouldn't he be worried about the country?"
Of course, crying politics at this late stage in the greatest game of political chicken we've seen in at least 15 years is laughable. Mr. Boehner is suggesting that Mr. Obama just wants to avoid having another debt vote before the 2012 election because doing so would hurt his chances of success. The flip side of that coin is that forcing another vote on the debt ceiling before the 2012 election would be good for Mr. Boehner's party. The politics are a wash.
But there is good policy justification for Mr. Obama's insistence on a longer-term deal. Administration officials say it is crucial to add some element of stability and certainty to the world financial markets and not have the possibility of another giant political showdown — in an election year, no less. There's real truth to that because this crisis isn't really about whether the United States has sufficient resources to continue paying its debts in the short term. That we can certainly do; even without an increase in the borrowing limit, the nation would have enough cash flow to make interest and principal payments on the debt, assuming those are put at the head of the line, which they almost certainly would be.
The question is about whether the nation's political system is capable at this point of making the difficult decisions necessary to reduce borrowing over the medium and long term. That's why the bond rating agency Standard & Poor's, for one, has indicated that the United States could face a costly downgrade even if it does avoid default next month. A temporary patch might well not be enough to convince the markets that the danger has passed.
Speaker Boehner is set to detail his idea today, but reports over the weekend suggest it would include an immediate $1 trillion in additional borrowing authority and $1.2 trillion in cuts over the next decade. That would be enough to allow the government to pay its bills through January. The Boehner plan also calls for the creation of a bipartisan Congressional commission to consider a bigger deficit reduction plan, including reforms to entitlement programs and other spending cuts, and possibly also an overhaul of the tax code that would net additional revenue. The second debt increase authorization would be contingent on the successful adoption of the commission's recommendations.
But given the current political environment — one in which there is almost as much dissension within the Republican caucus as between the two parties — there's hardly any guarantee that a commission's recommendations would lead to a successful conclusion, and much reason to believe it wouldn't. After all, we had another such commission — headed by former Sen. Alan K. Simpson, a Republican, and former White House Chief of Staff Erskine Bowles, a Democrat — and its recommendations have not produced a consensus. Nor did President Obama's offer of a "grand bargain" on about $4 trillion in deficit reduction, weighted heavily toward spending cuts. Nor did the Senate "Gang of Six" proposal, which would have done much the same thing.
The best thing for the country would be to pair a vote to increase the debt limit with the kind of major deficit reduction plan the president is championing. Despite his rhetoric and abandonment of negotiations with the president on Friday, Mr. Boehner appears to recognize that and understand the magnitude of the opportunity he is being presented to do something important. But given that a significant portion of his caucus won't vote to raise the debt ceiling or revenues under any circumstances, he has proved to be a less than ideal negotiating partner.
Failing that, crafting a plan that includes a significant down-payment on deficit reduction and a large enough increase in the debt ceiling to take us past the next election, as Senate Majority Leader Harry Reid is reportedly doing, makes good sense. Such an approach would be evidence that both parties are serious about deficit reduction but that they have different ideas about how to go about it. In that circumstance, putting tough decisions off until after 2012 isn't such a bad idea.
In the last two elections, the American people have sent Washington conflicting messages about what they want. With the battle lines now clearly drawn, the 2012 election offers them the opportunity to provide some clarity. In his remarks on Sunday, Mr. Boehner reflected a politician's view of elections as being about who wins or loses. But they are more fundamentally about the American people deciding how they want to be governed. Given the seemingly irreconcilable differences of our leaders, an election may be just what we need right now.