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Debt Dilemma

by Pete Sepp / /

Another week, another debt ceiling struggle. That’s what many taxpayers must be thinking as House Republicans ready their response to President Obama’s take-my-marbles-and-go-home stance that he get an unconditional increase in the federal borrowing limit.

The House Republican package pairs a short-term debt ceiling boost with a congressional salary-suspension gimmick that takes effect if Congress once again fails to pass a budget. Once again, Washington appears unable and unwilling to confront the fiscal forces that will make future debt showdowns inevitable. These are the entitlement programs that will, left unreformed, devour an increasingly large share of the federal budget and trigger monstrous middle-class tax increases in the years (no longer the many decades) ahead. At the same time, military and discretionary programs offer opportunities for savings that elected leaders time and again leave on the table. Failing to address these issues makes a future hard default increasingly likely.

Tactically, the GOP package is somewhat understandable, and perhaps even palatable. The offer dulls one of Obama’s rhetorical bludgeons (that Republicans are about to risk default/downgrade/doom of civilization for spending reductions) while calling the President’s bluff (that he’s willing to talk about such reductions outside the context of debt ceiling debate). Further, it puts pressure on the Senate to finally pass a budget and tell the American people how it plans to address our fiscal problems. The short extension will give Congress and the White House that “outside the context” – shifting focus to other deadlines such as the $109 billion sequester and providing room to craft deeper reforms.

On balance, approving another boost in the debt ceiling is never cause for celebration. It is another reminder of Washington’s wanton overspending. Indeed, when President Obama waved his sanctimonious finger earlier this month at reluctant Republicans for the equivalent of eating a huge meal and skipping out on the bill, he revealed his cluelessness. Raising the debt limit isn’t “paying the bill,” it’s passing the bill along to another hapless generation of taxpayers who will be left to starve financially.

Nonetheless, the alternative, caving completely to the President’s ultimatum and passing a long-term increase in the ceiling, is much less appetizing. Short-term debt extensions were commonplace when Ronald Reagan was President and Democrats controlled one or both chambers of Congress and we are hopeful that this extension will create an opportunity to enact the real fiscal reforms that are essential.

Still, call us underwhelmed, as we await the end of the sideshow and the beginning of the main event taxpayers keep getting promised.