Memo to the House: Extend the Debt Limit and Open the Government

Recently, there are hopeful signs that retailers and manufacturers are pressuring Congress to end the impasse over the spending limit. [ref name=”NRF calls for Immediate End to Government Shutdown”]NRF”]NRF Call for Immediate End to Government Shutdown. October 9, 2013. Available: http://finance.yahoo.com/news/nrf-calls-immediate-end-government-160000729.html;_ylt=A2KJjagM3lZSjWoAC9zQtDMD%5B/ref%5D  [ref name=”GOP Lobbyist: Business Needs to ‘Step Up’ Against the Tea Party”]Fang, Lee, GOP Lobbyist: Business Needs to ‘Step Up’ Against the Tea Party, The Nation Magazine. October 9, 2013. Available: http://www.thenation.com/blog/176578/gop-lobbyist-business-needs-step-against-tea-party%5B/ref%5D Of course if the taxpayer walkout suggested by [intlink id=”1305″ type=”post”]General Honoré[/intlink] had anything to do with it, we’ll never hear it from John Boehner.  Sadly, we have yet to see evidence of his good intentions.  

According to an Associated Press article, [ref name=”House GOP leaders seek short-term debt extension”]Associated Press. House GOP leaders seek short-term debt extension. October 10, 2013. Available: http://www.pbs.org/newshour/rundown/2013/10/house-gop-leaders-seek-short-term-debt-extension.html%5B/ref%5D  Boehner is offering to increase the debt limit, but only through November 22.  In addition, he intends to hold on to the bargaining chip of the government shutdown, meaning that the decision to reopen the government will remain in the hands of a few rogue politicians and we will go through this again before the end of the year.  

To be fair, the bit about the default came at the end of my last article. Depending on one’s level of cynicism, that post could be interpreted as a plea to avoid a default on the debt, never mind the government shutdown.  Obviously, nothing can be left to chance.  

I agree with Treasury Secretary Jacob Lew who stated that the United States should not be put in this position.  He was referring to the Republicans’ determination to hinge their spending bill on deficit reduction and cuts in government programs.  Lew also objected to the attempts by Sen. Orrin Hatch of Utah and other GOP senators to extend the debt limit for the shortest period they can get away with.  

“Our view is this economy would benefit from more certainty and less brinksmanship.  So the longer the period of time (for the debt extention) is, the better for the economy.”

In my opinion the Republicans’ proposals are doubly unacceptable because of the time constraint.  The House is not scheduled to pass this bill until Friday.  That pushes a resolution into next week, assuming the Senate approves the bill.  They should be made aware that if they continue to work on a bill that merely postpones this train wreck until a later time, they are wasting precious time. 

The outlines of a reasonable agreement are there:  Obama is willing to sign a short-term increase so that Boehner has more time to work with the Tea Party faction.  That would head off a default.  Even Rep. Paul Ryan, R-Wis. has dropped his demands on ‘Obamacare’ and would extend the borrowing cap for four to six seeks to allow talks on a budget deal. Then, as Finance Committee Chairman Max Baucus, D-Mont. said, “We need to reopen the government and pay the nation’s bills, no strings attached.”  

I’m aware that when taxpayers forego discretionary spending it is a hardship on retailers and manufacturers, but the Republicans in the House, the Democrats in the Senate, and President Obama know how to remedy that. Our walk out should continue until Congress passes an acceptable bill as described above.  

When the crisis has passed, we should make changes in procedure to assure this can never happen again. [ref name=”How to Solve the Debt Ceiling Crisis Forever”]Green, Joshua. How to Solve the Debt Ceiling Crisis Forever. Businessweek. October 7, 2013. Available: http://www.businessweek.com/articles/2013-10-07/how-to-solve-the-debt-ceiling-crisis-forever[/ref]

 

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