GOP Now Owns the Debt Crisis

The House of Representatives overwhelmingly defeated the motion to pass a “clean” increase in the United States’ federal debt limit last night.  No surprise, right?

But one or two gems emerge from what analysts have called nothing more than a publicity stunt.

First and foremost, about 60 per cent of Democrats voted in favor of a clean (unamended) debt increase.  This means that they supported what is officially and formally President Obama’s position and the stance of Treasury Secretary Tim Geithner.  These Democrats came primarily from safe districts, but their support could ultimately put House Republicans in an uncomfortable position come August 2.

Why?  Because the House must pass or not pass the debt increase.  The House is controlled by the Republicans.  Thus any negative fallout from the debt battle will be laid at the feet of Republicans.  House Democrats have already revealed a “responsible” position with a majority voting aye.

The second gem is the revelation that a growing number of House Republicans are beginning to think very seriously about the consequences of the debt increase vote.

Two scenarios have been discussed most prominently.  One, which I will call the “Toomey Plan,” merely says this—vote against a debt ceiling increase, force the Treasury to pay the debt on time and in full, and then see where Treasury will find the tens of billions of dollars needed each month to keep total government debt below $14.3 trillion.  Sen. Pat Toomey of Pennsylvania first pushed this notion.

For members who have defense or non-defense employees in their districts (in other words, almost everyone in Congress) the Toomey Plan would lead to the cuts of hundreds of thousands of jobs, shutdown of most government agencies, and a whole host of problems.

A second scenario though may win out.  This scenario involves a relatively small “down payment” in the form of $1 trillion or so in savings over the next decade, coupled with a strong enforcement mechanism that forces further savings in the future.  So far, the “SAVE-GO” proposal pushed by the Bipartisan Policy Center (of which I am a member) has received good responses publicly and on the Hill.  A combination of compelled future savings and the down payment may be enough to get House passage.

I have heard the argument that if the debt ceiling fails, with the consequences of large job losses and disruption of essential government services, President Obama will get the blame.  Those of us who went through the 1995-96 government shutdowns know better.  We watched on television as President Clinton took the oath in January 1997, for his second term as President after he turned the shutdowns on us.

With the Obama/Geithner “clean bill” request, and a majority of House Democrats supporting it, the entire credit or blame for passage or failure of a debt increase will fall squarely on the House Republicans.

To my Republican friends still on Congressional staff who argue with me, I simply say, “Well, are you willing to risk your boss’s career on that?”

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