Guest Editorial: Spare US a debt-ceiling drama
In an interview shortly after he announced his intention to retire last month, Speaker of the House for a While Longer John Boehner said: “I don’t want to leave my successor a dirty barn. So I want to clean the barn up a little bit before the next person gets there.”
Congress returned to the Capitol this week, and House Republicans have yet to find a viable or willing replacement for Boehner.Before Bd If he’s looking for a way to make the place more presentable, he could start by getting the House to raise the debt ceiling.
The U.S. government reached its debt ceiling in the middle of March. Since then, Treasury Secretary Jacob Lew has employed “extraordinary measures” to borrow funds without breaching the ceiling. Lew now says that on Nov. 3 that game, too, will be up; the government will have insufficient funds to meet its obligations.
This crisis, like previous games of chicken focused on the debt ceiling in 2011 and 2013, is entirely manufactured. Congress has already passed the legislation that required the spending that resulted in the debt. Raising the debt ceiling simply allows the government to make good on its obligations.
The consequences of not letting it do so — check that, the consequences of the mere possibility that the government wouldn’t pay its debts — are measurable not just in political polls but in dollars.
The 2011 crisis resulted in a credit downgrade and $1.3 billion in higher government borrowing costs in that fiscal year alone. Increased borrowing costs on Treasury securities issued during the 2013 crisis ranged from $38 million to $70 million through Sept. 30, 2014.
These figures, remember, represent the cost of a resolution; an actual breach would be vastly more expensive. Rates are already rising on those short-term Treasury bills that are most vulnerable to congressional failure.
Boehner has two weeks to find a resolution. If he follows the script from previous fiascos, he will push up against the deadline with a public show, facing down the White House and the Treasury while House Republicans denounce profligate spending. Then, Boehner will secure enough votes from responsible members of his conference to join Democrats in doing what must be done. As for the Senate, John Cornyn of Texas, a member of the Republican leadership, said he would like to raise the debt ceiling through 2017 to remove it as an election issue.
That there are members of Congress who relish the prospect of destroying their nation’s credibility in financial markets is one of the unsettling facts of an imbalanced era. That they would do so largely for the pleasure they take in political preening should compel Boehner to bypass them altogether and go straight to a bipartisan solution.
Ideally, Boehner’s barn-cleaning will resolve the most vital issues before he departs and someone else claims the worst job in politics. Those include a highway funding bill, facing an Oct. 29 deadline, and new spending authority, which expires Dec. 11. Such action would require the speaker to put the interests of the nation ahead of some House Republicans’ appetite for drama and destruction. There’s no good reason to do otherwise.