It hasn’t gotten much attention, but two big budget showdowns are looming in Washington in the weeks ahead. The first is what to do about raising the $18 trillion debt ceiling. And the second is whether to retain the spending caps/sequester cuts in the 2016 budget. Treasury Secretary Jack Lew announced last week that Congress will bump up against the debt ceiling in November.
These fights take on special salience now because voters are rightfully angry about the fiscal mismanagement in Washington over the past several years. In 2015 the U.S. government ran up one of the largest budget deficits in history — borrowing more than $1 billion a day seven days a week and twice on Sunday.
President Obama has made his demands clear. He wants to bust the spending caps this year and he wants a debt ceiling extension from Congress with no strings attached. Outgoing House Speaker John Boehner says he will “clean the stables” on this issue before he leaves office, and some are interpreting this as a sign that he will avoid a conflict and agree to Mr. Obama’s demands.
If Republicans don’t get this right, it could so demoralize conservatives that it would doom their chances of winning the White House in 2016 no matter who the candidate is.
So here is a two-step process for victory. First, on the budget law, the GOP must, must, must not allow Mr. Obama and big spenders in both parties in Congress to blow through the spending caps or cancel the sequester. If Republicans can’t even hold to their own self-imposed budget constraints the first year they have control of both houses of Congress, why would any voter believe that they will get serious about budget control later? I sure wouldn’t. Capitulating now could add up to $1 trillion in new spending over the next decade. The only condition for raising the caps is if Mr. Obama agrees to a dollar for dollar level of entitlement spending cuts, which alas, is highly unlikely.
The debt ceiling is trickier. House Speaker John Boehner says he wants to get this raised by the time he leaves, but this may mean merely agreeing to a no-conditions $1 or $2 trillion debt hike to get us past the election.
Some on the left argue that we should not even have a federal debt ceiling — that the government should have a rubber stamp to borrow at will. For the big spenders in both parties, this would conveniently eliminate one of the last checks and balances against runaway spending.
So the answer is no. Fiscal conservatives should demand reasonable conditions to reduce future borrowing in the future.