The looming "debate" over whether to raise the debt ceiling beyond $14.3 trillion is not a debate in the typical sense, in which one side argues for the wisdom of a policy and the other argues against it. Rather, it's a debate like that between a hostage negotiator and a suicide bomber. Unless the negotiator agrees to the bomber's demands, the bomber will take out the negotiator and everyone else with him.
The bombers, in this case, are Republican freshmen, who don't even take office until next year. Many incoming GOPers attacked their opponents during the 2010 campaign for voting to raise the debt ceiling, arguing that such a move allows out-of-control government spending. Now that stance has put them in a bind: Do they stick with their principles and vote against raising the ceiling—which could shut down the government when Uncle Sam can't pay his bills—or compromise and get labeled as flip-floppers? (A vote on raising the debt ceiling is likely in February.)
Sen.-elect * Mike Lee of Utah, for one, isn't budging. "I'm going to vote against raising the national debt ceiling," he told Larry Kudlow on CNBC. "We simply can't continue to mortgage the future of our unborn children and grandchildren." Rep.-elect Bill Johnson of Ohio is also opposed: "Most of us agreed that to increase the limit would be a betrayal of what we told voters we would do." Republican Sens. Tom Coburn of Oklahoma and Jim DeMint of South Carolina pledge to vote against raising the ceiling unless it's coupled with a spending cut. The Republican leadership, meanwhile, isn't so hot on the idea. "We're going to have to deal with it as adults," incoming Speaker of the House John Boehner told the Wall Street Journal. "Whether we like it or not, the federal government has obligations, and we have obligations on our part."
The possible showdown between Democrats and Republicans—not to mention within the GOP—prompted Alan Simpson, co-chair of the president's bipartisan deficit commission, to gleefully predict a "bloodbath." Simpson said he hopes the fight forces Democrats to accept some of the commission's deficit-reducing recommendations.
Why the disagreement among Republicans? Perhaps the elders have learned their lesson. In 1996, Boehner, then a freshman, led the last budget showdown between a Republican Congress and a Democratic president. When the parties came to an impasse, Boehner blamed Clinton: "We have offered to work with the president to avert this crisis," he said. "But so far, all we have gotten are excuses."
Everyone remembers the outcome of that gambit. The new Republican majority refused to raise the debt ceiling. President Clinton refused to meet GOP demands, which included eliminating the Commerce Department. The government shut down. Newt Gingrich made an unwise comment about how Clinton had once made him sit at the back of an airplane. Voters blamed Republicans for the crisis. Clinton was re-elected.
What would happen if Republicans forced another shutdown? This time would be worse. The administration would have to come up with $1.4 trillion in savings to make up for the budget shortfall. With a total annual budget of $3.8 trillion, that would entail a budgetary massacre. Treasury would be unable to sell more bonds, driving the already vulnerable bond market haywire. Investors could also take it as a sign that the United States is unable to repay its debt. And as in 1996, voters could blame Republicans.
Odds are we won't get there. The most likely result is a face-saving compromise. Democrats agree to a trim here, a cut there. Republicans declare victory. Everyone votes to raise the debt limit. Nothing changes.
The irony is that both sides want to reduce the deficit—or at least say they do. But refusing to raise the debt ceiling is a terrible way to get there. Sure, self-appointed deficit hawks will extract a few minor budgetary concessions. But that will build up the kind of partisan resentment that makes a larger-scale, sustainable solution—like the one soon to be proposed by the Simpson-Bowles commission—impossible. If Simpson wants his reforms to pass, maybe he shouldn't be looking forward to a "bloodbath" but instead should be trying to avoid one.
Correction, Nov. 23, 2010: This article incorrectly identified Mike Lee as a representative-elect. (Return to the corrected sentence.)