Only in the Washington Post would the Committee for a Responsible Federal Budget, which is Maya MacGuineas’ wholly owned subsidiary of the Peterson Foundation, be termed an “independent” group. But their analysis of the plan introduced last week by President Obama on fiscal policy unintentionally reveals a hidden truth:
The analysis, by the bipartisan Committee for a Responsible Federal Budget, found that the plan Obama unveiled in a speech last week would require the nation to borrow another $7 trillion during the next decade, compared with about $5.5 trillion under the House Republican budget and about $5.3 trillion under the recommendations offered in December by Obama’s fiscal commission.
The point of this was to show that the President’s plan “falls short” of the Ryan plan or Simpson-Bowles. However, it shows that every single deficit reduction option on offer still adds trillions to the debt, and furthermore, on a relative basis, the plans aren’t terribly far from one another on that basis. All of them would require an extension of the debt limit, and probably more than one.
Two questions come out of this: does this mean that piling on more debt is actually not the catastrophic scenario that deficit peacocks make it out to be? And the answer to that is absolutely yes. Our budget situation today is not that far outside historical norms, and would not be a problem at all if only Congress would adhere to the choices already made – sunsetting the Bush tax cuts, ending wars, allowing the baselines to go forward. It’s civilian employment that’s in a place of historical anomaly, not the debt.
The second question would be, if this is the case, and even the most right-leaning budget plan adds trillions to the debt, why would Congress put itself in the unfavorable position of having to make this debt limit vote every year? The answer is that they aren’t – or at least they weren’t, until Republicans came back into power. In 1979, Dick Gephardt passed a House rule saying that the debt level would be automatically set based on the level of the projections in the budget resolution. That held for almost 20 years, until the Republicans took over the House and saw a way to use the debt limit vote as a hijacking of the government. So they waived the Gephardt rule. And this Republican House did the same thing.
Old House rule: The “Gephardt Rule” allowed the House to automatically raise the debt limit when a joint budget resolution was adopted.
New House rule: A new rule eliminates automatic debt-limit increase upon passage of joint budget resolutions.
So here we see the real reason that we’re having this debt limit conversation at all. We’re having it because Republicans want to use it as an opportunity. They’re bluffing, of course, because they’ve made it clear to the White House that the debt limit will eventually increase. But nobody has really called that bluff yet. In fact, you can say that the White House is taking advantage of the opportunity just as the Republicans are.