A debt crisis is a terrible thing to waste in a presidential election season, and Democrats and Republicans alike are responding on cue.
The late-breaking news Saturday night that talks toward a $4 trillion deficit reduction plan had been scrapped was a devastating blow to the many who had begun to hope that a big bipartisan solution was possible.
House Speaker John Boehner issued a statement saying that the $4 trillion deal that he and President Obama had favored was off the table: “Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes,” Boehner said in the statement. “I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase.”
While the Biden proposal is half the deal Boehner, Obama and others had hoped for, it is still something more than anyone could have expected even a few months ago. And that perspective is worth considering as both Republicans and Democrats threaten to walk away from any agreement that would lead to raising the debt ceiling.
No plan will please all, obviously. And the meeting among top leaders scheduled for Sunday will be a test of wills, but also of courage and of compromise. Few honest brokers think that we can prevent a financial catastrophe without both cuts and revenue increases, but there are surely ways to get there from here without necessarily punishing the poor or the wealthy.
Where there are wills, there are ways.
Meanwhile, not raising the debt ceiling is fraught with peril. Even prolonging raising the ceiling is potentially hazardous before a default happens, as investors take preventive actions that could distort the money markets.
Republicans have made enormous advances toward government reforms that were viewed as unachievable a year ago. Voting no may have become the aphrodisiac of small-government conservatives, but it is not necessarily an act of bravery or wisdom.
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