Unless Congress acts, the U.S. government will hit its $16.7 trillion borrowing limit by mid-October. That’s the latest estimate from Treasury Secretary Jack Lew, delivered in a letter Monday to House Speaker John Boehner, R-Ohio. Coupled with the Sept. 30 expiration of the government’s authority to spend money on discretionary programs, Lew’s letter sets the stage for yet another round of Washington’s seemingly endless partisan wrangling over fiscal policy.
Unless Congress acts, the U.S. government will hit its $16.7 trillion borrowing limit by mid-October. That’s the latest estimate from Treasury Secretary Jack Lew, delivered in a letter Monday to House Speaker John Boehner, R-Ohio. Coupled with the Sept. 30 expiration of the government’s authority to spend money on discretionary programs, Lew’s letter sets the stage for yet another round of Washington’s seemingly endless partisan wrangling over fiscal policy.
To date, no combination of policy necessity and deadline pressure has sufficed to force a “grand bargain” that would address the country’s long-term budgetary imbalances. Will the latest threats — a partial government shutdown if there’s no new spending bill; an even more damaging default if the debt ceiling isn’t raised — induce any better outcome in the handful of legislative days available after Congress reconvenes Sept. 9?
In some ways, the impasse has worsened since Congress and President Barack Obama cobbled together a temporary fix to the “fiscal cliff” drama nine months ago. A promising series of meetings between Obama and a group of compromise-minded Republican senators fizzled. Sen. Ted Cruz, Texas, and others on the GOP right launched a deeply mischievous campaign to “defund” Obamacare, the premise of which is that this is the last chance to stop the hated program and Republicans should reject any spending bill that contains money for it — even if that means shutting down the government. Never mind a Congressional Research Service paper that shows this would be futile, since Obamacare’s implementation does not require new discretionary spending authority.
The defunders make it more difficult for Boehner and other party leaders to maintain unity in their ranks, the necessary precondition for even a short-term budget bill. Still, the GOP has an overwhelming political interest in avoiding blame for a partial shutdown, so Boehner may be able to find the votes for a continuing resolution that keeps Washington operating for a couple of months, at or near current spending levels. Boehner has provocatively forecast “a whale of a fight” over the debt limit, but assuming an extension can be arranged, that, plus a continuing resolution, would give Democrats and Republicans time to work on something a bit more permanent.
But what? Realists speak of a modest bargain to replace some across-the-board cuts to defense and domestic programs set in current law (the so-called sequester) for a couple of years. The price would be higher user fees (but not tax increases, which are anathema to Republicans) coupled with cuts to entitlements, such as farm programs (but not Social Security and Medicare, sacrosanct to Democrats). And then on to 2016!
We don’t doubt the realism of cramped ambition, but we do lament it. The broad outlines of a grand bargain are known to all: trims to Social Security and Medicare, combined with revenue-enhancing tax reform sufficient to set the federal deficit on a declining path in the medium to long term.
The sacrifice would be real but, for most Americans, modest, and certainly more modest than what later generations may face if we do nothing. So far, neither congressional Republicans nor Obama — despite his erstwhile vows to stop “kicking the can down the road” — has been willing to embrace this truth and act on it. They still have a chance to change this fall, if they choose to take it.