Debt ceiling debate: 'Politics on steroids'

  • Article by: JIM SPENCER , Star Tribune
  • Updated: July 17, 2011 - 10:32 PM

Division within Minnesota's delegation over how to avoid the impending U.S. default mirrors congressional gridlock at large.

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President Obama and Congress have 15 days to raise the debt ceiling — currently $14.3 trillion — by Aug. 2 or the United States will default on its bills. However, Obama has warned that Congress must actually have an agreement in place in just 4 days — Friday — in order to give Congress enough time to enact it.

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WASHINGTON - Like most of their congressional peers, members of Minnesota's delegation say they care desperately about avoiding default on federal debts.

As the debate has intensified over the past several weeks, the delegation has offered several options for managing the country's debt and deficit. But like others in Congress, the conflicting beliefs within Minnesota's delegation are so strong that they could be helping to drive the country toward a potentially catastrophic default.

"This is all the pathology of American politics on steroids," explained Don Kettl, dean of the University of Maryland's public policy school.

Minnesota's delegation is a microcosm of the gridlock over whether to raise the debt ceiling. Disagreements about how to get it right threaten the ability to get it done -- 15 days before Aug. 2, when the United States would default on at least some of its obligations.

"We have people in this body who voted numerous times for debt ceiling increases who now say it's not necessary," said Minnesota Rep. Tim Walz, a Democrat. "We've got to get beyond this. I am willing to look at every proposal."

But proposals from the state's delegation have gone nowhere.

Months ago, Rep. Keith Ellison, a Democrat, offered a bill to raise the nation's debt ceiling with no plan for deficit reduction. A so-called "clean" debt ceiling bill that mirrored what Ellison wanted died in a lopsided House vote in May.

Last Tuesday, GOP Rep. Michele Bachmann cosponsored a bill that would allow government bond holders to be paid without raising the debt ceiling, but doesn't pay $1.1 trillion in other bills. Federal Reserve Chairman Ben Bernanke pronounced the Bachmann's strategy a path to financial calamity.

Last Friday, Democratic Rep. Betty McCollum offered a bill to raise the debt ceiling, but keep Congress in session during its normal August recess to work on debt and deficit reduction. Her proposal has almost no chance of getting out of committee in the GOP-run House.

In the coming week, Sen. Amy Klobuchar expects her chamber to offer a bill to raise the debt ceiling, cut spending and increase revenue. At the same time, Republican Reps. John Kline and Erik Paulsen hope to vote Tuesday for a House bill that ties a higher debt ceiling to a bill to cut and cap spending, and then call for a balanced budget amendment to the Constitution.

Prospects not good

So far, little hope flickers for those plans. What Democrats want, Republicans won't accept -- and vice versa.

The legislative package that Democrat Klobuchar envisions in the Democrat-controlled Senate defies a no-new-taxes pledge by the Republican-led House. And the balanced budget amendment and spending caps that Kline and Paulsen covet look like deal breakers in the Senate.

If the country doesn't pay its bills, Kettl said, "we wouldn't be far down the road before every one of us gets smacked in the face with something we don't want."

Some fear we are dangerously close to that.

"I don't see how this gets worked out at this point," said Rep. Collin Petersen, a moderate Democrat who has voted across party lines.

"If I was to guess today, I'd say the Republicans will pass a bill in the House that the Senate won't pass. I'm sure it will be a bill I can't vote for."

His pessimism is significant.

Disagreement in the details

What's left may be a version of a proposal by Senate Minority Leader Mitch McConnell, R-Ky., that passes control of debt limit increases from Congress to the White House. This is a move scorned by many, including Walz, as "punting."

Kline said he believes a last-minute deal is still possible. "As you get closer to a deadline, Washington tends to get things done," he said.

Kline believes the debt ceiling must be raised. But the retired Marine insists that any such deal must come with a deficit reduction plan that does not include tax increases. GOP Rep. Chip Cravaack takes the same stance. Bachmann, who is running for the GOP presidential nomination, has said she will not vote to raise the debt ceiling.

"As a House member, finding rational negotiating partners on the Republican side is unfortunately becoming increasingly difficult," said McCollum.

Yet Kline, Paulsen and Cravaack, like their party's leadership, hold firm. "Absent Republican commitment in the House," said Kline, "nothing will happen [on the debt ceiling]."

Meanwhile, the opposite is true in the Democrat-controlled Senate. Attempts to tie a debt ceiling increase to cuts in Social Security, Medicare or other programs appear dead on arrival, unless they come with new revenue sources.

"We need sensible cuts in spending with some increases in revenue," maintains Sen. Al Franken, a Democrat.

Franken recently gave a 58-page speech in the Senate chamber about increasing the debt ceiling and reducing the deficit. Among his proposals was to cut Medicare costs by allowing states to bargain with pharmaceutical companies to lower drug prices. He also called for ending tax breaks for the rich and ending tax subsidies for oil companies.

Franken says those who say there is no need to raise the debt ceiling are "misguided and playing fast and loose." Klobuchar called the standoff "Russian roulette."

Policy experts and economists seem to agree.

Congress is "playing with fire," according to Jay Kiedrowski, a leadership expert at the University of Minnesota's Humphrey School of Public Affairs. The prospect of default already has credit rating agencies threatening to lower the nation's rating. Should that occur, the United States would have to pay more interest to government bond holders, increasing the national debt and raising interest rates on consumer loans.

Even a temporary or partial failure to pay bills could increase everyone's borrowing costs and keep unemployment high, Fed chief Bernanke said last week. The public will blame those who let it happen, Kiedrowski said.

"If we have a default, the voters will take it out on incumbents in the next election," he said.

Safe 'no' votes

Ellison says he finds the current gridlock mind-boggling. Yet he holds fast to a promise to vote against any debt ceiling deal that cuts Social Security or Medicare.

"I'm not hearing from my constituents that I should have to cripple Social Security to raise the debt ceiling."

Bachmann, a Tea Party conservative, and Ellison, a devout liberal, both seem likely to vote against a debt ceiling bill, and neither seems likely to suffer political consequences for the same reason. Both represent "safe" districts where their reelection is seemingly assured.

Ellison said he would take the same position in the debt ceiling debate no matter how politically diverse his district was. "The bottom line is that this is a core value for me," he said.

Bachmann didn't respond to a request for comment.

"You have people who can take positions on the extremes because they are in safe districts," Kiedrowski noted. "They depend on the majority of Congress to act responsibly so they don't have to."

Thus far, however, the majority of Congress has not acted responsibly, said Kettl. Many seem to be operating under a false reality that is driving much of the debate, he noted.

"We have talked ourselves into believing we can make massive cuts in the government -- and no one will feel the pain."

Jim Spencer • 202-408-2752

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