Financial Transparency Coalition

flickr / deltamike

This week, barring some extraordinary unforeseen circumstance, the U.S. House of Representatives will vote to reject President Obama’s request to raise the debt ceiling.

“Oh no,” I can already hear America’s collective sigh. “Are you kidding me? Again?”

Well, actually, not again.

In case you need a reminder of the horrific events of last August (I certainly don’t want one): in what should have been a routine vote, Congress nearly failed to raise the debt ceiling, which would have sparked an economic Armageddon. I do not use that term lightly. Just in case you need another reminder, the debt ceiling has nothing to do with how much debt the U.S. government takes on, just how much it promises to pay back. Failing to raise the debt ceiling is not the same as cutting the budget—it’s just reneging on payments that have already been promised.

So economic Armageddon didn’t happen. Instead, on July 31^st, just two days before the deadline, President Obama and Congress came to an agreement. The agreement would raise the debt ceiling by $2.4 trillion in two stages, called for $2.4 trillion in spending cuts (including $900 billion immediately), and it created a “super committee” tasked with coming up with a second round of cuts. If the super committee failed to come up with these cuts—the agreement would trigger an automatic reduction of $1.2 trillion, split evenly between defense and non-defense spending.

SURPRISINGLY the super committee reached gridlock and failed to agree on a new round of cuts by the November deadline. Sen. Patty Murray (D-Wash.) and Rep. Jeb Hensarling (R-Texas), the co-chairmen of the supercommittee noted in a joint statement: “After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline.”

Some Republicans looked (and likely continue to look) to avert the automatic cuts put in place by the August agreement, but President Obama vowed to veto any attempt to do this, contending there would be “no easy off-ramps on this one.”

But there was another little caveat in the original August agreement. That was this business of debt ceiling increases in “stages.” Now the agreement says that Congress doesn’t have to approve the debt ceiling increases in these stages, it just can’t disapprove of them. The difference is subtle, but important. In the first instance, which was the case in August, if Congress fails to act, the debt ceiling would not be increased. In the second instance, both houses of Congress must reject the increase or it will pass automatically.

We are in that case.

So the House will vote this week to reject President Obama’s request to raise the debt ceiling, knowing full well that the Senate, which has a majority of Democrats, will not follow suit. Congress literally voted for it so they could vote against it.

Political theatrics at its best.

But none of this—none of it—addresses the underlying issue. The United States government has, for decades, committed to spending more than it has collected. Eventually this will become a problem. It’s important that we address the underlying structural problems that are contributing to this imbalance. It won’t be solved overnight—and evidence suggests it doesn’t need to be—but the theatrics are wasting all of our time. Let’s spend our energy on solving the problem instead.

The pessimist inside me says that’s easier said than done. Especially given the track record.

Image:  Some rights reserved by deltaMike