One after the other, John Boehner House Republican leader and Mitch McConnell Republican Senate leader asserted that Obama will not get Congress to raise the $14.6 trillion debt ceiling without a multi-year agreement to cut $trillions out of the budget. Their case is wrapped in the crisp utterances of volunteer firefighters rousted to save America—and their ubiquitous grandchildren—from another untimely emergency. The directness of Boehner and the smooth mind of McConnell are beguiling. Their tricks and their audacity amuse. But something rather sinister is unfolding.
There is no debt crisis. Otherwise, interest rates on US government securities would have soared the day the Republicans passed into law their multi-year fiscal plan called “The Path to Prosperity” which projected decades of further deficits and trillions in additional borrowing.
There is no political crisis in Washington about raising the debt ceiling. Both parties, their leaders who helped create the debt obligations, and their elder statesman, all agree that the debt ceiling will have to be raised substantially (and without undue drama) or the American economic recovery and, conceivably, world trade, will collapse.
The US and its governing institutions have the political power and the financial means to rebalance the US government, with a triple-A credit rating, with modest changes in spending and taxing—they can solve a big problem through bi-partisan compromise and get re-elected.
On The PBS NewsHour on May 12, McConnell insisted that the “time is now” to strike a $multi-trillion, bi-partisan deal to cut public spending; otherwise, America will become just another Greece. A real emergency doesn’t need such a shaky analogy. To compare America to Greece in assessing its ability to manage its debt is alarmist blackmail. The Greeks can’t afford northern Europe’s social safety net because they are significantly poorer. To suggest that America’s bare-bones social safety net is unaffordable and indulgent is mean and dishonest. It’s like being lied to by the family’s banker. Last year, on a GDP per head basis, Americans were about $15,000 richer than Greeks. If that’s not good enough, Americans are also richer than Germans, Britains and Canadians. They all have center-right governments with legislated deficit reduction plans and social services that are universal and often more generous than those in America.
That isn’t to say there isn’t a political emergency in Washington—the Republicans are telling the President to do their bidding on spending or they will refuse to raise the debt ceiling. They’ve taken a loaded gun to the meeting to force the President to do what they suspect they have no chance of doing in next year’s national elections. Essentially, they’re saying: “We can act recklessly because you’re President and, as President, you can’t.”
America’s system of divided and independent spheres of power has permitted America to grow into a superpower and lead the free world. However, American politicians have had to yield to its ungainly terms. The great compromise—the nation-wide election of the president and, separately, the nation-wide election of Congress—means that neither institution can speak alone for—or set aside—the interests of the people.
The threat to bring the country to the edge of financial collapse is false. Obama will have to find away to raise the ceiling otherwise thousands of Republican investors and millions of low income Americans will be hurt. However, the Republican threat is a threat to the credible functioning of the US government. It’s offensive—and far worse than the antics of that British prince who wore a Nazi uniform to a celebrity ball.