Our "debt" is in bond form, and the bond market has pretty much said America does not have a debt problem. Bond buyers are still buying our debt at record-low, near zero interest rates, even today in 2013. While the $16 trillion number is big and scary, and is about 100% of GDP, it's really not a big deal to the private market forces that are needed to keep it. Our deficits are small compared to our GDP each year, and the market will buy it. We do have a long-term debt problem, that doesn't elicit much debate, but what will happen in 2035 is not currently the most pressing issue facing us. Our crumbling infrastructure, underachieving schools, underperforming health care system, energy issues, and food safety issues are much more pressing to me than the long term debt, and much easier solved when you can borrow money at a zero interest rate. A basic course correction in the moment can allow us to do what needs to be done on the pressing issues, and come back to the debt later on.
Even if we do want to deal with this now, there is no agreement that spending is the big issue. Taxes are at a historical low in America, even today, and don't really compare to big growth decades like the 50s, 60s, and even 90s. Most of us would agree that while spending is a part of the solution, we have to collect more revenue. Any spending cuts in a deal right now should be coupled with closing loopholes in the tax code that take revenue away. Any cuts should also not come from low spending departments like say, Education, as anyone with a brain who looks at our budget can tell. The 2013 budget:
Item Requested Individual income tax 1,359 Corporate income tax 348 Social Security and other payroll tax 959 Excise tax 88 Customs duties 33 Estate and gift taxes 13 Deposits of earnings and Federal Reserve System 80 Other miscellaneous receipts 21 Total 2902Total outlays by agency (in billions of dollars):
Let's just be honest, our government spends on defense, health care, and Social Security, and not much else. If we're going to make cuts, let's make them to actual spending, and not waste our time cutting the small amounts of money spent on domestic programs that help the public. We don't spend but barely over $200 billion on energy, education, and transportation combined, but spend just shy of $700 billion on the Defense Department alone, almost all of it not on payroll or benefits for troops.
Mitch McConnell knows that, and knows that he can't propose to cut Defense, or to cut entitlements without taking a political hit. This is why he's proposing a no revenue bill, with big spending cuts, in exchange for Congress lifting the artificial debt ceiling to pay our old bills, and requiring the Democrats to propose the spending cuts. He doesn't want to take the political hit for it. He knows his position is not realistic, and he wants to not have his handprints on it.
There's literally no reason for the President to take this deal. If there's going to be a deal on the debt ceiling, it should go something like this: the GOP agrees to eliminate the debt ceiling all together, forever, and in exchange the President negotiates actual cuts to future entitlement spending that saves money. Basically, they give up their leverage chip forever, and the President in exchange negotiates a deal on the spending cuts that actually would effect the total budget.
In reality though, this is total dysfunction, and the President should consider not even getting involved. The debt ceiling must be raised by an act of Congress, approved by him. Essentially, the House should pass their version, the Senate their's, and then Congress negotiate a deal that ultimately passes. At that point, in theory, the President should join then. In reality, Congress should give up the debt ceiling power all together as well, and end it for all times. Congress' power is over spending, not administrating the government, and these kinds of fights get into day-to-day functions of government. House Republicans should take the deal I mentioned above, give up this power for good, and seek to enact their agenda under their functional power, which is to pass continuing resolutions to fund the government, or pass an omnibus, or pass whatever form of spending bill they'd like. They should be passing legislation that builds their own institutional power, and is actually what they belong doing.
They can't take up their fight through the less damaging appropriations process because the House Republicans, and for that matter the Senate ones too, are not functional bodies. Paul Ryan in the House continues to pass a budget annually that has zero chance of passing the Senate, and can't be signed into law by a President who opposes it. On the Senate side, the Senate GOP filibusters virtually every bill now, and makes it impossible to get 60 votes for a budget to move out of the chamber. Since the Republicans are too dysfunctional to allow Congress to pass one budget for the year, there's virtually no way they can put the added pressure on Continuing Resolutions to actually set spending levels. Instead they have to manufacture insane little crises', one after another, and get budget control acts to force things like sequester on us. They create these continual and perpetual fights, then expect the Democrats who disagree with the beginning premise, to take the hits for actually governing. This is not helping the country, and is putting us all at the mercy of a dysfunctional party full of ideological people who don't get reality. This is no way to run a country.