Should Republicans Vote to Raise the Debt Ceiling?

Posted: Jan 18, 2011 9:55 AM
New Jersey Governor Chris Christie and former Minnesota Governor Tim Pawlenty -- who've forged reputations as fiscal hawks in historically blue states -- have voiced forceful opposition to the idea:

Two high-profile Republicans have come out against raising the federal debt limit. Gov. Chris Christie of New Jersey and former governor Tim Pawlenty of Minnesota said on Fox News Sunday that GOP lawmakers should take a hard line with the Obama administration on spending, specifically in regard to the upcoming vote to increase the debt limit, even if it means threatening to shut down the government (or actually doing it).

And they aren’t just talking the talk — Christie narrowly avoided a shutdown earlier this year when he refused to take up a Democratic proposal to raise taxes on the rich, while Pawlenty actually did allow the Minnesota government to shut down for nine days in 2005 over a disagreement with the Democratic legislature over taxes and spending.

Christie suggested that Republicans do what he did in New Jersey — by standing firm on principles, force Democrats to cave. “I think what [they] have to do is to go out to the public and make their case,” he said. “They won the election on those arguments. Now articulate those arguments and have the guts to put up or shut up.”

Conservative columnist and former Bush speechwriter Marc Thiessen dissents (persuasively in my view), arguing that the potential fallout from a federal default would be calamitous.  Thiessen says congressional Republicans should ultimately agree to raise the debt ceiling, but not before extracting numerous, meaningful concessions from Democrats and the White House on budget cuts and entitlement reform:

What kinds of concessions will the GOP demand? Symbolic spending cuts won't cut it. Republican should require real reductions paired with iron-clad constraints on future spending. Sen. John Cornyn, a member of the Senate Republican leadership, has called for linking the debt-limit increase to a balanced budget amendment to the Constitution, so we can put a spending "straitjacket on the federal government." Sen. Tom Coburn (R-Okla.) has demanded a "minimum" of $350 billion in spending cuts. Sen. Lindsey Graham (R-S.C.) has insisted that Congress enact entitlement reform first. A good united GOP starting position should be: all of the above.

If President Obama does not go along, Republicans should let the deadline pass without raising the debt limit. The government would not immediately go into default. The Treasury Department has many tools it can use to continue paying U.S. obligations during an impasse -- such as suspending sales of nonmarketable debt, trimming or delaying auctions of marketable securities and under-investing in certain government trust funds. Treasury has used these tools before. In 1985, Congress waited nearly three months after the debt limit was reached before it authorized a permanent increase.

...A debt-limit standoff could go on for months, but the GOP should not give in. Obama will have a hard time making Republicans seem unreasonable, since he voted against raising the debt limit himself as a senator. And the president has the political winds against him -- 71 percent of Americans oppose raising the debt limit. They won't blame the GOP for holding out in the name of restoring fiscal discipline. If anything, Republicans could face a major backlash if they fail to do so.

No matter whose advice prevails, both sides seem to agree that it would be political and fiscal suicide to allow Democrats to run roughshod over this process.  No matter what path they settle on, it will require a unified Republican front to convince Democrats that the GOP is prepared to, in the words of Chris Christie, "put up or shut up."