The Washington Post
Dec. 3, 2012
Congress can't do anything without a gun to its head. And even then, it is way too willing to play Russian Roulette. As we saw last year during the scuffle over raising the debt ceiling, Congress came very close to pulling the trigger on a gun loaded with bullets. This year's down-to-the-wire machinations over "the austerity crisis" (a.k.a. the fiscal cliff) includes a proposal from Treasury Secretary Tim Geithner that ought to be adopted.
As part of the plan to head off the latest manufactured, but very serious crisis, Geithner wants to wrest the power to raise the limit on the nation's borrowing away from Capitol Hill. Basically, as The Post explained on Friday, he proposes making permanent the system devised by Senate Minority Leader Mitch McConnell to avoid a debt-ceiling calamity last year. While the White House could raise the limit on its own, Congress could reject it by majority vote. An all-but-certain presidential veto could then be overridden by a supermajority of Congress...
The debt-ceiling craziness wasn't without cost. There was the downgrade in U.S. creditworthiness by Standard and Poor's, which dealt a blow to national pride and pocketbook. But as Steve Bell, senior director of the Economic Policy Project at the Bipartisan Policy Center (BPC), pointed out there are other costs involved in a debt-ceiling showdown that would be saved if Geithner's solution were adopted.
"Certainly, financial markets would probably be relieved if the president's proposal on the debt ceiling were to become law," Bell wrote in an e-mail. "Indeed, the [Government] Accountability Office issued a report earlier this year that showed that last year's debt ceiling showdown cost the federal government $1.3 billion. We at BPC estimate that, using GAO's methodology, last year's showdown will cost $19 billion over the next 10 years. That is the approximate cost that CBO estimated last year that the doc fix' for Medicare would cost. So, the present system, when it runs into legislative confrontations, is not costless. It costs real money."
Read the full blog post here
Economic Policy Project