MAYBE IT’S something in the water in Williamsburg, but the House Republican majority has started talking a bit more sensibly about the looming end of the U.S. government’s legal authority to borrow money.
The GOP’s new position is that it will pass an unconditional increase of the debt ceiling, one large enough to last through the April 15 deadline for each chamber to pass a budget. Approving a budget is something the GOP House has managed to do for the last couple of years, but the Democratic-controlled Senate has not. To heighten the contrast, and the pressure, the GOP debt-ceiling proposal would include a provision denying Congress its pay if either house fails to pass a budget.
Obviously this is still not an optimal plan; what financial markets, and the country generally, need is the assurance of a long-term debt-ceiling fix. However, it does mark the Republicans’ apparent abandonment of their demand for spending cuts equal to any increase in the debt ceiling, which was economically nonsensical — and politically impossible, given President Obama’s justified refusal to let Congress hold the nation’s credit rating hostage.
The White House responded positively to the GOP move, saying that Mr. Obama is “encouraged” by the flexibility. Senate Majority Leader Harry M. Reid (D-Nev.) issued a similar statement. Now, in fact, it’s the Democrats’ turn to tread cautiously. Even without the debt ceiling, two impending budgetary deadlines give the GOP leverage it can use to extract spending cuts: the March 1 “sequester” affecting $55 billion each of defense and domestic spending, and the March 27 lapsing of the current bill to fund government operations.
Mr. Obama must distinguish between the Republicans’ unreasonable positions and their reasonable ones. Refusing to consider tax increases and holding the debt ceiling hostage were examples of the former; both have now been significantly modified, if not abandoned.
Insisting on serious reforms to entitlement programs, however, was the GOP’s reasonable demand, one the Republicans have not abandoned. This presents Mr. Obama with a choice: He can continue driving a hard bargain, in both political and policy terms. That would presumably entail refusing to deal on entitlements until the Republicans capitulate with regard to the sequester and a partial government shutdown on March 27.
Or the president could act on his past promises to tackle entitlements and engage in good faith with Republicans now, so that they have no further reason to exploit the sequester or threaten a shutdown. In that regard, a reference Friday by the White House to purported GOP plans for “drastic cuts in Medicare” was not an encouraging development. There is still plenty of time for Mr. Obama and Mr. Reid to show that they are willing to treat the GOP’s change in position as an opportunity to address the country’s long-term fiscal needs, rather than their party’s short-term political ones.