Get ready for a little déjà vu from Washington. The federal government hit the debt ceiling, now set at a whopping $16.8 trillion. Yes, again. It’s like the Bill Murray movie “Groundhog Day” -- only this time, unfortunately, no one is laughing.
Time and again, Congress bumps up against the debt ceiling amid talk of finally getting spending under control. Time and again, they raise the ceiling, but only after a sufficient dose of political theater. How’s this for a punch line -- the gross debt breaks down to more than $140,000 per American household. Still not laughing?
Small wonder that more serious-minded lawmakers are trying to escape the cycle. They don’t want to risk another credit downgrade, which happened for the first time ever in 2011, the last time both sides were playing political football with the issue. But avoiding another downgrade will require a lot less theater and a lot more action.
“The United States of America, the most creditworthy nation on Earth, ought to pay all its debt in a timely fashion,” said Rep. Steny Hoyer (D-Md.) of the House democratic leadership team. “Playing politically motivated games with the creditworthiness of the United States will only risk another downgrade.” Just so, and so it’s past time to get spending under control.
Some GOP lawmakers have other ideas, however. The latest proposed tactic: attract conservative support to yet another debt-limit increase by tying it to tax reform. GOP lawmakers have long argued for a thorough overhaul of the nation’s tax code, which is needlessly complex and weakens the economy by perverting incentives.
There’s no question that tax reform is a worthy goal. But this is no time to fall for the old “fake stick toss”. To agree to raise the debt ceiling in exchange for a vague promise to pass some kind of as-yet-undisclosed tax reform somewhere down the road -- with no assurances from the president that he would sign it -- would be a mistake.
Now, it would be a different story if the debt limit were to increase if and only if Congress had already passed a concrete tax reform proposal, one that actually instituted the kind of pro-growth tax reform our economy needs, and all that remained was for President Obama to drop his opposition and sign the bill into law. That might be an arrangement worth supporting if the tax reform was good enough.
But at this stage, Congress is just getting started. Not only has the bill not yet passed the House or Senate, there isn’t even a proposal on the table to evaluate.