If Washington worked, this deal would pass
By Ezra Klein,
As the two parties drill down into ever more baroque and peculiar debt-ceiling plans, it’s worth stepping back and remembering just how easy this could, and should, be. Here, for instance, is a three-part proposal from the deficit hawks at the Concord Coalition:
Raise the debt limit by $1.9 trillion. This is the amount by which the debt limit would have to be raised to implement the House Republican budget through 2012. Those who voted for this budget, which includes all but five members of the Republican caucus, explicitly endorsed policies that would produce this amount of additional debt. So there should be no dispute about having to raise the debt limit accordingly.
Attach an enforceable mechanism for achieving budgetary goals. Looking ahead, the key issue is not the nominal level of debt but whether the debt is sustainable. That depends on the underlying policies that produce the debt. Because the policies now in place will produce unsustainable debt, the most important attachment to the debt limit vote, absent a big deal, would be a framework for enacting more sustainable policies. This should include fiscal targets and automatic triggers to ensure that the goals are reached. The Bipartisan Policy Center’s Save-As-You-Go proposal (SAVEGO) is an excellent model.
Fill in the details through “regular order.” With an overall framework in place, Congress could get back to the business of writing a budget resolution. Ultimately, the committees of jurisdiction will need to mark-up specific legislation, with instructions from the budget committees, to implement the fiscal framework. The House has adopted a Fiscal Year 2012 budget resolution, but the absence of a Senate counterpart has prevented negotiations over a joint resolution. That could change, however, if Senate Budget Committee Chairman Kent Conrad proceeds with a committee mark-up and floor vote on the budget he has put together behind the scenes.
These three steps would allow policymakers to raise the debt limit by no more than House Republicans have already voted for, while creating an enforceable fiscal sustainability framework to be filled in by the relevant committees doing the jobs they are supposed to be doing.
I would say the increase in the debt ceiling should be about $2.5 trillion, as that’s what we need to make it to 2013, rather than $1.9 trillion, which is an arbitrary number based on taking a budget that can’t pass and wouldn’t work if it did pass at its word. But the basic thinking here is sound: Raise the debt ceiling so the economy is out of danger, put in place a strong enforcement mechanism so the next part of the deal comes through, and then cut the deal or let the trigger do its work.
Notice that in this deal, the consequence of not reaching a deal on the deficit is that SAVEGO reduces the deficit, rather than the debt ceiling destroys the economy. Doesn’t that make more sense?