Stop playing chicken with the debt ceiling

President Obama chastised lawmakers last week for not reaching a deal to raise the debt ceiling. The onus is on the president and GOP leaders, however, to resolve their parties’ differences. And judging by remarks on both sides, there’s little hope for a breakthrough soon.

At least two aspects of the impasse are unnerving. First is the willingness on the part of lawmakers to play a game of chicken with the debt limit. There is a faction within Congress that clings to the belief that the debt ceiling can stay where it is — $14.3 trillion — even after the Aug. 2 deadline that the Treasury Department says is the last day to avoid defaulting on some federal bonds. It’s conceivable that the government could simply pay the interest on its debt and cut the rest of its spending roughly in half, as draconian as that would be. But it’s absurd to think the credit markets wouldn’t be spooked, driving up interest costs not just for Washington but for every mortgage holder, municipality and other borrower whose rates are tied to Treasury bills.

Second is the refusal by Republicans to consider any change in the tax code that would bring in more revenue. The GOP is right to insist on deep spending cuts over the coming decade. The federal government is consuming an unsustainable portion of the economy, in part because of efforts to counter the effects of the recession, in part because of burgeoning healthcare costs. But spending cuts alone won’t bridge the gap, especially as baby boomers start collecting Medicare and Social Security.

The tax code is long overdue for a reform that winnows the thicket of exemptions, deductions and credits, particularly on the corporate side. Republican leaders, however, have taken the position that eliminating any of these tax breaks — hundreds of billions of dollars’ worth annually — is off the table. But defending “tax expenditures” en masse means swearing fealty even to misguided or unaffordable decisions that previous Congresses made. Even die-hard tax-cutters see the need to change course occasionally — witness the Senate’s recent vote to abandon tax breaks for ethanol.

There is a long tradition of grandstanding on votes to raise the debt ceiling; Obama himself engaged in that sort of thing when he was a senator. But it’s disingenuous. It’s time for the two sides to move out of their ideological corners and cut a deal.