The debt ceiling, the GOP and reality

The federal government is about to max out on its credit card, and it could default on its bonds or other obligations if it can’t borrow more money. House GOP leaders went to Wall Street this week to try to reassure the markets that Congress will honor its commitments, but the message that Speaker John A. Boehner (R-Ohio) delivered Monday offered no such confidence.

Boehner told the Economic Club of New York that there would be no increase in the debt ceiling unless certain conditions were met. He demanded $2 in spending cuts for every $1 the debt ceiling was raised, specific spending reductions rather than targets, and no tax increases. That sounds like he’s picking a fight with Democrats, not demonstrating fiscal responsibility.

The current borrowing limit ($14.3 trillion) has to be raised because spending programs, tax cuts and entitlements previously approved by Congress are causing the federal government to spend more than it takes in. The vast and growing budgets for defense, Medicare and Medicaid pose such problems over the long term that the recently passed House budget resolution would increase the debt by more than $5 trillion over the coming decade even as it reduced projected deficits by about $6 trillion.

The conditions Boehner seeks run counter to the recommendations of every bipartisan commission that’s studied the federal budget gap in the last year. They’re also impractical. Allowing tax rates to head in only one direction — down — rules out overdue reforms such as simplifying the tax code and winnowing the thicket of special-interest exemptions, credits and deductions. And using a combination of deficit targets and automatic enforcement mechanisms instead of trying to identify trillions of dollars in forthcoming cuts would let future Congresses adjust priorities while moving just as rapidly toward a balanced budget.

Boehner said he understood how irresponsible it would be for Congress to force the government into default. But it would be almost as irresponsible to drag the debt ceiling negotiations out long enough to spook investors into demanding higher interest rates on their Treasury bills, raising the government’s borrowing costs. We understand the pressure Boehner’s getting from the “tea party” faction in his ranks, which would rather have the government default than allow any increase in the debt limit. But Republicans don’t control the Senate or the White House, so they can’t presume to dictate the terms of a deficit-reduction deal.