Jennifer Rubin (hat tip: Glenn Reynolds) lays out the various plans now being debated to solve the debt ceiling stand off. I have a slightly different take, but read the whole thing nonetheless. Rubin argues that the McConnell plan “may be the worst option except for all the others.”
I think that it’s the worst possible outcome. McConnell’s plan gives Republicans in the House only political cover, but they gain that by engaging in a constitutionally dubious dodge, meanwhile they get nothing as a result. Remember, Republicans earned the majority because they promised that this time they would get spending under control. If all Republicans are going to accomplish is to ensure that future out of control spending can be blamed only on Democrats, we voters could achieve the same result by putting Nancy Pelosi back in control.
The truth is that the House majority is the only entity that matters in this debate. Without them, no Presidential action can raise the debt limit, and the Senate is powerless to act on its own.
But that doesn’t mean that the President is without his own cards to play (continuing the President’s playing card analogy, which by the way, he badly played). As I argued back in April, we have no debt crisis problem as a result of the soon to be reached debt ceiling. In fact, the 14th Amendment, which does NOT give the President the power to unilaterally raise the debt limit, ensures that we will not have a crisis.
“The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
In other words, the President has no latitude about what bills he has to pay first: he must pay our creditors–ie, there is no immediate bond crisis.
After that he has a great deal of latitude. The only problem is that to exercise that latitude, he must violate the anti-impoundment act. He has no choice. It is either violate a law or the Constitution. In other words, math makes the anti-impoundment act anti-constitutional.
But, here is where The President can play his cards. Aside from our debts, the bills that the President refuses to pay until the debt ceiling is raised are entirely up to him. He can make Republicans squirm by squashing Republican programs the most.
That puts the GOP in an awkward position. Big donors and the Republican base (exemplified by the Tea Party) are not in alignment. Defense contractors, insurance firms, banks, and the real estate industry, they have all traditionally been big GOP contributors over the years. They want this “crisis” solved, because they know that they’re on the losing side in this card game. On the other hand, the Tea Party would like nothing more than to kick the monied-GOP power elite out of the party. Obama could put 2012 Republicans in the difficult position of having enormous grass roots support but no money. (My hunch is that Eric Cantor is quite fine with that outcome, but John Boehner and Mitch McConnell are horrified–hence Cantor’s swagger.)
But eventually there is going to have to be a debt ceiling increase. I wish it weren’t so, but too many things that the government does can’t realistically shut down overnight. Besides, the deficit (40% of every federal dollar spent) is too big for the President to only attack GOP programs. At some point he’s going to have to compromise.
What Eric Cantor and the renegade House Republicans should hold out for is exactly what Glenn Reynolds suggests: a constitutional solution that solves the America’s debt problem once and for all.
And here is the Amendment I would write:
1. Congress shall levy no tax on individual citizens except that it be applied equally to all, and without threshold, exemption, deduction, credit, exception, or limitation of any kind.
2. The Federal government shall be required to operate without an annual fiscal deficit except in years containing a period of declared war, not to exceed a total of four years in any consecutive ten year period.
This amendment accomplishes three things: First, it balances the budget in every year except when there is a true crisis. (Oh, how I hate the overuse of that word.) Second, the amendment, while not limiting the amount of taxation that may be applied, distributes it evenly, thus making it very difficult to raise taxes too high since all Americans are equally effected. Finally, it removes class warfare and cronyism from the tax code and makes taxes what they are supposed to be: a way to raise necessary revenue for the government, instead of what they are now: a way to reward friends and punish enemies.
Ultimately that amendment will do more to bolster the US debt rating than any short term plan could ever accomplish. So Eric Cantor, I ask you to not let this crisis go to waste.
UPDATE: Thanks for the link, Glenn. And thanks to all who stopped by. Special thanks to those who have commented on proposed amendments. Look around.