It's time to eliminate the legal authority of a single House of Congress to destroy the full faith and credit of the United States. The recent crisis shows that Tea Party Republicans continue to view the debt limit as a negotiating lever to extract political concessions each time our bills come due -- repeatedly driving the country to the edge of the fiscal cliff, then leaving it up to the grown-ups to steer clear of disaster at the last second.
Yet to allow radical factions to retain their abstract right to precipitate debt-limit crises is very damaging. Investors will demand a premium on Treasury bonds to compensate them for the risk that some future stand-off will spin out of control. In the longer run, the underlying uncertainty will undermine the central position of the dollar in the monetary system, depriving the country of the great economic advantages that flow from issuing the world's reserve currency. In contrast, a decisive effort to put our house in order will establish that Washington is determined to avoid future fiascos.
This is the point of a bill I introduced that changes the rules of the debt-limit game. Under the reformed procedures, the president would announce, on an annual basis, the increase required to avoid default. Congress would retain the power to reject the president's initiative by a simple majority vote of both Houses -- and if the president responded with a veto, two-thirds majorities could still insist on ultimate control. In restricting its power to play politics on this issue, however, Congress would be redeeming the Fourteenth Amendment's command that "[t]he validity of the public debt of the United States... shall not be questioned."
This basic reform idea is already gaining acceptance. The recent Reid-McConnell compromise increased the debt limit through February 7, 2014, but not through the traditional method of hiking the authorized ceiling by a precise amount. Instead, it grants the president authority to issue new debt, subject to a joint resolution by both Houses rejecting his proposed increase. The task is to convert this temporary emergency measure into the new normal.
Even in these polarized times, it should be politically possible to hammer out the precise terms for future presidential-Congressional collaboration. While Tea Party Republicans may harbor dreams of another government shut-down, they know that the threat of a debt default comes with an emergency brake. After all, Senator Ted Cruz (R-Texas) had it within his power to deny unanimous consent to the speedy consideration of the Reid-McConnell initiative. Yet he allowed responsible minds to stop him and steer us to safety when confronting the midnight hour that threatened the end of fiscal solvency.
A show of bipartisan commonsense will also set the stage for a successful round of budgetary negotiations. Sen. Patty Murray (D-Wash.) and Rep. Paul Ryan (R- Wisc.) have already made it clear that their budget committees won't be trying to reach a "grand bargain" before the new December 13th conference deadline date. Nevertheless, a modest accord is needed to avoid another calamitous episode just after New Year's. Even this will require some tough compromises. A decisive breakthrough on the debt-limit will serve to encourage both sides to make the necessary concessions.
I am not looking for miracles. The point is to show Americans and the world that step-by-step, Washington is slowly regaining its capacity for responsible action.
The challenge is to take that first step, and quickly, before memories of the debt-limit crisis grow dim.