I cannot say I am very pleased with the latest proposal to come out of the House. They would extend the debt ceiling until November 22, while banning "extraordinary measures" by the Treasury Department to keep things going beyond that date. The government would stay closed while the sides negotiate a budget. And President Obama has said he will "likely sign" such a measure. Republicans have apparently figured out that the shutdown and the debt ceiling are becoming identified in the public mind (something I was counting on) and want to separate them.
So, Republicans will grant their more valuable hostage a reprieve until November 22 and then definitely shoot it, and they will hold onto their less valuable but more visible hostage. In the meantime, budget negotiations will take place. Republicans have already let it be known that any budget based on the numbers they have supported all these months would be an intolerable capitulation, and only massive cuts will persuade them to reopen the government and again extend the debt ceiling. Oh, yes, and the Tea Party faction will settle for nothing less than ending borrowing altogether, i.e., an immediate balanced budget.
Okay, trying to salvage anything even minimally encouraging from all this, it probably means that the Republican leadership is aware of how dangerous a debt ceiling breach will be and is not willing to risk it. If they will grant the hostage this one reprieve, they will probably find a way to grant another. Or maybe the Crazy Caucus will find the humiliation so painful that only an actual breach will remedy it.
The real, underlying problem here is that the Tea Party caucus wants something that is not achievable. Many of them will settle for nothing less than an immediate balanced budget. Given that about a third of budget* is covered by lending, and given that Republicans are united in their belief that taxes are intolerably high and must never be raised no matter what., that means cutting federal spending by about a third, immediately. Tea Partiers have convinced themselves either that these cuts will be painless or (more probably) that any pain resulting from such cuts will be much less than the looming crash that will strike if we continue to borrow. They consider a debt ceiling breach a perfectly reasonable way to stop the borrowing once and for all.
Of course, there is another, perfectly normal and acceptable way within our system of government to stop the lending. That is to submit an actual balanced budget. That will do it; the lending will stop. But, of course, the Republicans, even the Tea Party, don't actually know how to do that. Any budget that cut federal spending by a third (or even 20%) overnight would be politically unpalatable. It would be greeted by outrage among the general public, and even much of the Republican base. It would not pass the Senate. It would not be signed by the President. It probably would not pass the House. Hell, I don't even know if would be acceptable to much of the Tea Party. Any serious attempt to balance the budget is going to take time, patience, and planning. As Megan McArdle says, you can privatize air traffic control, but you cannot privatize them by the end of the month. You can convert Social Security into a system of private accounts, but you cannot retroactively have made everyone save the requisite amount. And even if the Tea Party believes that borrowing is so dangerous that there simply is not enough time for an orderly reduction in spending, it certainly is not so urgent that it cannot wait a few months for the House to come up with a balanced budget.
I can only take the Tea Party's enthusiasm for a debt ceiling breach as an implied acknowledgement that they don't know how to balance the budget overnight and are punting it to the executive. Yes, that's right, after denouncing Obama as an out-of-control executive and an elective dictator, they now want him to decide which spending gets cut so they don't have to. A more honest strategy is the one that others seem to like -- shutting down the discretionary portions of the government and then deciding which parts they like so they can reopen them. But all in all, it reminds me of an old joke about the female college student who approached her professor about a looming term paper. "Please," she said, "I'll do anything for an 'A' on my paper." "Anything?" "Yes, anything." "Good, then. Write an 'A' paper." The Tea Party will do anything for a balanced budget. Anything? Yes, anything. Good, then. Write a balanced budget. Anything but that!
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*Actually, I have heard figures as low as 20%, but even that would be intolerably painful to cut overnight.
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