Worries over a looming debt limit crisis have eased as the result of a House vote to suspend the limit until May 18 and then automatically raise it to accommodate any additional borrowing up to that point.
The GOP plan, approved last Wednesday on a 285-144 vote, was a departure from House Republicans’ previous insistence that a debt limit increase would have to be accompanied by an equal amount of cuts in spending. The Senate is expected to approve the new legislation this week, and President Obama has indicated he does not oppose it.
The legislation also calls for withholding pay from members of Congress if their chamber fails to pass a budget blueprint by April 15.
Concord Coalition Executive Director Robert L. Bixby has called the Republican plan “a constructive shift of focus away from threats of default and towards the need for a budget.” Concord has also urged elected officials to reform the debt limit process, which has proven to be ineffective.
A day before the vote, the House Ways and Means Committee heard testimony on debt limit issues.
William Hoagland, senior vice president of the Bipartisan Policy Center, offered a timely warning: “We at BPC strongly believe that the imbalance in our federal ledger does need to be addressed. Prolonged negotiation over the debt limit, however, has the potential for substantial downsides to our economy – increased uncertainty, instability in the markets, disruption to individual and families’ lives – and our standing in the world as having the currency of choice.”
Simon Johnson, a professor at the Massachusetts Institute of Technology, expressed well-founded concerns as well: “Repeating a showdown over the debt ceiling every three to six months is sure to prolong the agony of the economic recovery. In fact, this would be one of the worst possible economic policies imaginable.”
J.D. Foster, a senior fellow at the Heritage Foundation, stressed the need for changes in Social Security and Medicare. Lee Casey, a partner at the law firm BakerHostetler, disagreed with the theory that the 14th Amendment gives the President constitutional authority to raise federal debt without congressional approval.
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Washington Budget Report: Jan. 29, 2013
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Debt Limit Plan Offers Constructive Shift in Focus
Lawmakers Promise to Pursue Budget Resolutions
As Congress considered the “No Budget, No Pay” provision in the debt limit legislation, leaders on both sides of the Capitol publicly committed last week to passing a budget resolution this year.
A budget resolution is a non-binding blueprint that establishes funding levels to guide Congress as it considers spending and revenue legislation during the year. It is not signed by the President, however, and does not have the force of law.
Senate Budget Committee Chair Patty Murray (D-Wash.) said that the Senate would “return to regular order and move a budget resolution through the Budget Committee and to the Senate floor.” In a memo to her Senate colleagues, Murray said that any budget deal should be balanced and that the next steps should include “equal amounts of responsible spending cuts and new revenue from the wealthiest Americans.”
The Senate has not completed a budget resolution using procedures in the Budget Act since 2009. Senate Democrats have argued that a budget resolution was not necessary for the last two years due to enforcement provisions in the Budget Control Act of 2011.
Speaker John Boehner and House Budget Committee Chair Paul Ryan said House Republicans are committed to doing “a budget that will balance over the next 10 years” and urged the President and the Senate to also propose balanced budgets.
In an interview Sunday on NBC’s “Meet the Press,” Ryan said “spending is the problem” and opposed using any additional new revenue for deficit reduction.
The Concord Coalition has long argued that Congress should fulfill its responsibility to pass annual budget resolutions that set fiscally responsible revenue, spending, and deficit-reduction targets and include credible budget enforcement mechanisms. The commitment by both parties to consider a budget resolution is a promising first step. It should be followed by specific examples of the difficult policy choices that will need to be made in each budget proposal and by efforts on both sides to compromise.
On Monday, the Senate approved legislation to provide $50.5 billion in appropriations for recovery from the damage caused by Hurricane Sandy. The House approved the legislation earlier this month and the President is expected to sign the bill into law.
Forums Will Promote Public Engagement on Fixing the Debt
The Concord Coalition is partnering with the Campaign to Fix the Debt on a series of public forums around the country in the coming weeks aimed at building support for comprehensive fiscal reform.
“We at Concord are delighted to be involved in a project that we believe can help lay the groundwork for comprehensive fiscal reform in the near future,” says Harry Zeeve, Concord’s national field director, in a new blog posting. “The Campaign to Fix the Debt, which was launched last year, has been working with business leaders, political figures and hundreds of thousands of citizens from across the ideological spectrum who want to see elected officials step up to solve the nation’s fiscal challenges. The impact is being felt in Washington already.”
Ten programs are being planned in six states: Colorado, New Hampshire, Iowa, Wisconsin, Florida and Tennessee. The speakers will include national and regional experts on the rapid growth of the federal debt and related issues, including entitlement reform, the problematic tax code and rising health care costs.
The first forum was held today in Nashville, featuring former Tennessee Gov. Phil Bredesen, CapWealth Advisors CEO Tim Pagliara, and Robert L. Bixby, Concord’s executive director. Other programs have been set for Feb. 11 in Manchester, New Hampshire, and Feb. 19 in Des Moines, Iowa.
More information on upcoming programs will be available soon at concordcoalition.org and fixthedebt.org.