How Difficult Will Raising the Debt Ceiling in the New Congress Be?
by Gary Therkildsen*, 11/3/2010
In February, Congress was barely able to raise the federal government's debt ceiling to allow Uncle Sam to continue borrowing. The votes, which occurred along strict partisan lines, only provided the government with one year's worth of additional borrowing capacity. With a new wave of conservative lawmakers on the way to Capitol Hill in January, will commitments to dogmatic principles by a majority of new members prevent the government from meeting its debt obligations?
Stan Collender over at Capital Gains and Games has been warning for months about the potential for fiscal gridlock in Washington should Republicans take over one or both houses of Congress in the midterm elections.
Now that Republicans have taken the House by a healthy margin, Collender reassures us, "The biggest fights in Washington over the next two years will be over anything having budget implications." Conservatives, he predicts, will fight "epic battles with religious fervor the likes of which haven't been seen in Washington since prohibition." One of those battles will be over raising the debt ceiling.
Tim Rutten, writing in the Los Angeles Times, picks up Collender's theme, and argues that while tea party types and the Republican establishment will be eyeing different agendas in Congress, both groups seem to have a new respect for intransigence toward compromise over important policy issues. Indeed, "Many of the new senators and House members have pledged to vote against an increase in the debt."
Some conservatives, such as likely Majority Leader Eric Cantor (R-VA) and Sen. Tom Coburn (R-OK), have said they would be willing to vote for an increase in the federal debt limit for tradeoffs in lower government spending. Unreasonable demands on lower spending that the Obama administration would likely reject, though, might only encourage obstinate tea party types to continue to hold out against raising the debt ceiling.
The problem with this, as Rutten highlights, is, "No Congress has ever refused to approve such an increase and, if such a refusal were to occur, the consequences for the global financial system would be apocalyptic." Few of the new conservatives heading to Congress seem to have even attempted to grapple with this potential fallout.
Image by Flickr user dominiccampbell used under a Creative Commons license.