The dispute took a troubling turn this week when House Majority Leader Eric Cantor told Democrats that Republicans would not agree to a debt limit increase without significant spending cuts and budgetary reforms. According to Jake Sherman and Jonathan Allen of Politico.com, Republicans want such items as statutory spending caps, a balanced budget amendment and a supermajority vote requirement for tax increases and debt limit increases. Democrats want a bill without any such attachments. Should the Republicans make good on their threat and refuse to raise the limit, the nation would tumble into default. The resulting economic pain would be immense.
Without question, the United States needs to get its fiscal house in order, but using brinksmanship about the debt limit is a dangerous means to do so. As Megan McArdle, the business and economics editor for The Atlantic, pointed out on the magazine’s website when discussing the recent decision by Standard & Poor’s to lower the nation’s credit outlook, “Fundamentally, what both sides seem to have trouble grasping is that the important thing is not to solve all our problems right now, but to convince markets that we have the will and the fortitude to solve them at some point in the future.”
Unfortunately, will and fortitude in this manner seem to be capsized by the search for partisan advantage. A healthy, vigorous debate about spending reforms in Washington is essential, but that debate won’t happen in a car that is speeding off a cliff.
-- John Parnell for the Editorial Board (firstname.lastname@example.org)