While Republican leadership spent the day attempting to build support for House Speaker John Boehner’s plan to raise the debt limit, the party could actually be better off passing a modified version Senate Majority Leader Harry Reid’s proposal.
I’ve been enamored by the attempt by both sides to create a stark contrast between the dueling debt limit plans even though they are quite similar. Both plans raise the debt limit, claim $1.2 trillion in discretionary spending cuts, and create a joint Congressional committee to find more savings. Also, neither proposal does anything about entitlements.
The big difference is that Boehner’s plan breaks the debt limit increase into two parts, with the second one contingent upon the joint committee agreeing on additional deficit reduction. Reid wants to raise the debt ceiling all at once, and claims $1 trillion in phony savings from winding down the wars in Iraq and Afghanistan.
As we know, rating agencies have warned on two issues – they want to see the debt limit raised, and they want to see a credible plan that brings down our nation’s long-term debt.
Though both plans raise the debt limit, neither of them really get at the credible long-term deficit-reduction the agencies are seeking, and thus do not remove the threat of downgrade.
The biggest problem with adopting the Boehner approach is that it will enable Democrats to escape responsibility for any downgrade by claiming that it was the result of Republicans’ unwillingness to approve a longer-term debt limit hike. But if Republicans approved a version of the Reid plan, it would eliminate that ability.
While the current debate has allowed Democrats to conflate the two problems being raised by the rating agencies, approving the Reid plan would isolate the issue of our unsustainable debt, and any downgrade would be a result of a failure to address it. President Obama would have to explain to the American people why he presided over this downgrade, and he won’t be able to point fingers at Republicans.
No doubt, adopting a version of the Reid plan would lead to some degree of backlash among conservatives, especially because it violates Boehner’s vow that any increase in the debt limit be coupled with higher value cuts. But Boehner’s current plan is already under attack, because it already compromised on much more fundamental matters – it doesn’t make permanent structural changes and it doesn’t deal with entitlements, which are the primary drivers of our long-term debt.
Boehner would have to win some concessions from Reid as part of any agreement. A Senate vote on the Balanced Budget Amendment would be an obvious one, they can haggle over the composition of the discretionary spending cuts, and perhaps Boehner can extract more sweeteners.
I know some conservatives would argue that Republicans should reject both plans, and fight on, no matter the consequences from a failure to raise the debt limit by Aug. 2. But that’s an argument for another post.
My point here is that if Republicans have reached the stage where they’re willing to vote for something as compromised as the Boehner plan, they’d probably be better off with a version of the Reid plan.