Stanford University's Keith Hennessey, the director of the Bush/Cheney National Economic Council
Stanford University's Keith Hennessey, the director of the Bush/Cheney National Economic Council, concedes in a Wall Street Journal op-ed today that Republicans cannot follow through on their debt-ceiling threats. The political, economic, and electoral consequences would be too severe, he argues.
But Hennessey does not suggest the GOP simply meet its obligations without some strings attached. His plan suggests a series of short-term increases to the debt ceiling, instead of one long-term increase.
[Obama's] obvious goal is to punt the issue past the 2014 midterm election. Yet if he has to ask Congress for a new increase every few months, the spending problem his administration has exacerbated in his first term will dominate the policy agenda -- when he wants to work on other issues.
That brings us to step two, which is for congressional Republicans to offer Mr. Obama a choice. He can have a long-term debt-limit increase if he agrees to cut spending, or he can have repeated, short-term increases without spending cuts. If the president continues to dodge the country's long-term spending problem, the solution is to force him to ask Congress every few months to give him the authority to borrow more while facing questions about why he refuses to restrain spending.
Let's put aside for now the fact that Obama doesn't "refuse" to cut spending; Obama's already cut spending and approved $2.5 trillion in debt reduction. Let's also put aside for now the irony of these complaints from an economist from the Bush/Cheney administration, which made literally no effort to be fiscally sane.
As an economic matter, it's in the United States' interest to reassure markets and investors that we will continue to pay our bills. Having a conversation about default is incredibly dangerous; having several conversations a year about default is hopelessly insane.
But I find the politics of this even more peculiar. Hennessey starts from the premise that Congress has no choice but to raise the debt limit (i.e., Republicans can't shoot the hostage). But once that's established, what difference would it make to Obama if Congress has to cast this vote every few months or every two years?
Isn't it more likely Boehner & Co. would be annoying the president less and his own caucus more by bring debt-ceiling votes to the floor every few months?