Republican Debt Limit Tactics
With the debt limit due to kick in by the middle of February, there is not much time for Republicans to do what they should have done years ago. The danger of reaching the borrowing limit is not default on the existing debt. At present, average monthly revenues cover around 70% of outlays. In dollar terms, the monthly shortfall is around $100B. All that is needed is to spend less. The problem is that the debt ceiling is decoupled from budgets and appropriations. This can and should be fixed. From now on, annual increases in borrowing authority should be part of the annual budget and appropriations process. It is irresponsible to authorize spending without specifying some way to pay for it. This idea has been gaining support lately among Republicans, as reported by Rick Moran in his blog in American Thinker on Jan 8, 2013.
Rick's blog in turn refers to an article by Byron York in the Washington Examiner on January 7.
Failure to raise the debt limit by trillions of dollars at a time is often portrayed as a threat to the U.S. and world economies. But this is not the only way to go. Small monthly or quarterly debt limit increases can be used as a scalpel instead of an ax. Just to keep things from getting out of hand too fast, Republicans should offer an initial monthly increase in the debt limit to cover approximately 80% to 90% of the revenue shortfall one month at a time for the rest of FY 2013. That leaves something like $10B to $20B of forced cuts in monthly spending.
The unspent budget items should be sequestered, pending passage of an actual budget for FY 2014 with suitable permanent spending cuts. At that point, a one-year increase in the debt ceiling would be passed -- right after adoption next year of a budget for FY 2015, etc. All future borrowing authority should be coupled with annual budgets and/or appropriations.
Here is a sample list of possible sequesters. I am not suggesting that this is anywhere near the final list, but I present it as a point of departure. Note that 0% means no cut, and 100% means a total cut.
- 0% Interest on the national debt
- 0% Veteran benefits
- 0% Active duty military salaries
- 10% Other defense spending
- 20% Federal civil service salaries
- 50% Political appointees' salaries
- 100% Elected federal officials' salaries
- 20% Other non-defense discretionary spending
- 10% Other mandatory spending including entitlements
After a month or two of stalemate, the approved increase in debt limit could tighten to a smaller percent of the shortfall with suitable increases in sequesters, and so on. No doubt everyone will have a favorite sequester. Mine (evil grin) are the 50% cuts in pay for political appointees and the total cut for elected officials, but I'm not holding my breath.
Now, Democrats aren't going to embrace this proposal. But the American people might well accept it as a sensible way to deal with the ceiling without shutting down the whole government. If Democrats insist on an all-or-nothing approach to the debt limit, they should get the blame. I doubt the Democrats could stand the pain for even one quarter. Without an apocalyptic event to scare the American people, they should fold like the cheap suit they are.