Debt-ceiling Fight Over?
July 26, 2011
Last Friday, Speaker of the House John Boehner finally walked out on the unproductive talks with President Obama; he cut Obama out of the loop and went to negotiate directly with Democrats in the Senate, which arguably makes a lot more sense.
By yesterday, Boehner had already come up with a new plan, which he believes can pass both the Republican House and the Democratic Senate. Senate Majority Leader Harry Reid is also offering a Democratic alternative. Reuters gives more information on both plans here. An opinion piece on Reuters provides some analysis and argues that with respect to getting the debt under control, “the Boehner plan is not only far better than the Reid plan, it is a pretty darn good plan in and of itself.”
From a policy point of view, Yuval Levin agrees that the Boehner plan is pretty good, and the best that conservatives could have hoped for under current political constraints. Levin adds, “Even the Reid bill, . . . would be a better conclusion than has seemed plausible throughout much of this process,” and “Something between the two bills, which is now perhaps the most that Democrats can hope for, would be an extraordinary win for Republicans.”
From a political point of view, former Senator Fred Thompson argues that the Republicans have already won a great victory here.
Meanwhile Thomas Sowell argues that having a legal debt ceiling in the first place does more harm than good, while Mario Loyola makes the case for either a constitutional balanced-budget amendment or other deep, structural reforms.
Enjoyment and Contemplation 
July 26, 2011 at 4:14 PM
“Washington gets all its money from the states, and then returns it to them only on condition that they adopt federal preferences on a whole range of state policy issues. From the point of view of state legislators, this is not a source of support, it’s a straight-jacket. It’s their money to start with, and most of them would far rather spend it themselves on home-grown ideas. Even among those states that shamefully use the federal machinery to go rent-seeking among their more productive sisters, many state governments would vote to be rid of federal grants altogether if they could keep the tax revenue that finances them.”
Leaving aside the fact that Washington gets its money from individuals, who are both citizens of the state they live in and citizens of the United States (last I checked income taxes are not paid out of state treasuries), I wonder if you endorse this author’s radical view (whom you cited) that private income is the government’s to take?
July 26, 2011 at 4:36 PM
If you like, I’ll agree that you’ve found a minor error in the way Loyola phrased that blog entry—he calls money “their money to start with”, in a way that implies that it belongs originally to state legislators, whereas in fact it belongs originally to the taxpayers (or, in an even more prior sense, to God). It sounds as if he were blurring the people of the states and the state governments together a little bit in his mind—which is understandable, because they’re a lot closer to each other than either is to the national government.
The substantive point he’s making, however, is rock-solid: Under the Constitution, states can tax their citizens and spend the money on more or less whatever a majority of those citizens want, while the national government is allowed only to do the few things enumerated to it in the Constitution. Loyola says, “even liberal justices of the Supreme Court have seen conditional federal grants as perhaps the greatest threat to federalism.”
I take it from your silence that you agree with the substantive point he’s making, as well as with all the other pieces I linked to.
July 26, 2011 at 5:06 PM
If you’re asking whether I agree with the straightforward proposition that state governments have a general police power and the federal government does not, then yes. But to contend that conditional grants are the greatest threat to federalism is absurd – if anything, the abuse of conditional grants by the federal government would create a situation where states are forced to balance their budgets and rely less on federal money. If one views “federalism” as a hierarchical structure that ought to be preserved in its purest form, then the expansion of Congress’s Commerce Clause power is a much greater threat to our system of dual sovereignty, so much more so than conditional grants that it’s not even worth debating.
July 27, 2011 at 12:39 PM
“the Boehner plan is not only far better than the Reid plan, it is a pretty darn good plan in and of itself.”
I have nothing substantive to say about any of this, but I find it pretty amusing how low that Reuters opinionist’s expectations seem to have been. Not only is it relatively a good plan, it’s also actually a good plan!
July 27, 2011 at 2:36 PM
Sure, but I also have to admit that there are serious conservatives who don’t think it’s a good plan at all.
I’ll agree with them that it’s not ideal—Boehner himself called the deal not perfect—but I guess I think the most relevant question, as conservatives decide whether to support this deal or not, is whether we could really do much better, under current political constraints (Republicans control only half of one branch of government, as they say). If not, this is better than nothing; we should take it, move on, and start working on taking the Senate and the presidency in 2012.
July 28, 2011 at 10:27 AM
I’ve come back to the news! It feels good.
This guy on RedState (http://www.redstate.com/erick/2011/07/26/they-just-arent-serious/), for example, thinks that Boehner’s plan won’t be enough to avoid being downgraded by the credit folks, and reminds us that the “cut, cap, and balance” thingy missed by four tiny votes.
I think my favorite part of Boehner’s plan is the automatic cuts that happen if Congress spends too much. It’s sortof like a parenting strategy. Establish clear consequences for choices and let them choose. From my limited research, I think it sounds great, procedurally. It sounds like it was written to make things happen, to fix our problem.
This other guy (http://tpmdc.talkingpointsmemo.com/2011/07/debtnoument-reid-and-boehner-introduce-incompatible-plans-to-avoid-default.php) (we unlearned in the computer sciences cannot hyperlink in our comments), seems to be reporting that Democrats are still happy to posture and act as though Reid’s plan is simply the only thing that could pass. Reid predicts, apparently, that Boehner’s plan can’t make it through the senate, and that if it did, the President would veto it. What? That’s pretty hard to imagine.
July 29, 2011 at 1:00 PM
[…] Boehner originally released this past Monday, but in at least one sense, the fight is certainly not over yet. The situation continues to change rapidly. Stay abreast of events, if you like, on the […]
August 3, 2011 at 3:00 PM
[…] Tanner has the details on the deal (which has some things in common with the one Boehner proposed last Monday). He also gives some helpful perspective and numbers on America’s larger debt […]