Raise the Debt Limit or Cut Spending: How About a Compromise?

Julie Marsh

julie marsh
Julie Marsh
Welcome, new Tea Party representatives and senators! Washington really is a lovely place, and even as the new kids on the block, I'm sure you'll enjoy the perks of serving your constituents. However, you might find Congress operates a little differently than you expected. In fact, one of your first challenges next year -- whether to raise the federal debt limit -- is going to be a test of how well you understand the dynamics of national and global finance.

I know. It doesn't make sense at all to raise the federal debt limit when you've campaigned tirelessly to cut spending. What better way to stop discretionary spending than to cap our figurative national credit card limit? Doing so will force us to balance the budget and get our freewheeling habits under control, right?

Have you looked at the federal budget? Or the federal revenue? Rand Paul, you've said that there isn't a revenue problem. But according to this pie chart from non-partisan organization The Concord Coalition, well over a third of our revenue shortfall is absorbed by the deficit.

Likewise, you've said that it's a spending problem. Let's go back to the pie chart, which shows that we simply don't have enough discretionary spending in the budget to offset the deficit. Cut defense spending? Or Medicare/Medicaid coverage? Good luck with that. Like I said, you may find that Congress operates a little differently than you expected.

Tea Party Republicans, what happens if you get your way and we don't raise the federal debt limit? Stan Collender, former Congressional staffer on both the House and Senate budget committees, advises that such a move would "throw the markets into turmoil and create all kinds of concerns overseas about the US economy and the US government."

Even if the Democrats vote to raise taxes -- and, unlike the Republicans, our president is actually willing to compromise on that point -- we're not going to overcome the revenue shortfall without spending cuts.

Guess what? Fixing this problem is going to take compromise, something you newcomers and the Republican establishment oppose. Raising the debt limit is a foregone conclusion, unless you want to send the world into greater turmoil than we already did in the global credit crisis (which also means that financial regulation and oversight is necessary).

So when January rolls around, I hope you'll start by talking with Democrats and incumbent Republicans about spending cuts. But I'm not holding my breath. You were elected on a platform of rebellion, and I expect you'll follow through out of sheer stubbornness and in spite of the costs to your constituents and our country.


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