Democrats had good reason to celebrate President Obama’s victory in the fiscal cliff. The House Republican caucus wasn’t just routed; it was nearly torn apart, leading some observers as well as many of the president’s supporters to suppose that this was just the first of a series of triumphs in which their liberal agenda will be imposed on the nation as the GOP fades into insignificance. Perhaps they actually think the president can get away with making the deficit or the debt ceiling go away by merely minting a trillion-dollar platinum coin. But like other triumphalist predictions from both parties in the last decade, such expectations are bound to lead to severe disappointment. Republicans remain in control of the House and any idea that the president can impose further tax increases on the nation while failing to address the need for entitlement reform that is necessary to solve our long-term fiscal crisis is pure fantasy. That’s why so many on the left are pushing hard right now to persuade Republicans to give up the one clear piece of leverage they have over the budget process: the need to raise the debt ceiling within the next two months.
As Pete Wehner wrote last week, using that upcoming deadline to force the president to give in on spending cuts is a perilous enterprise. Past attempts to hold Democrats’ feet to the fire on the budget in this manner have failed miserably. Nevertheless, as I pointed out on Sunday, unilateral surrender on the debt ceiling is not an option for Speaker John Boehner. They must fight not only for the sake of the cause of fiscal sanity but to avoid a meltdown of their caucus that will strengthen the ability of Democrats to get their way on taxes and spending and lessening their own chances of a comeback in 2014. The question is how to do so without being seen as irresponsible hostage takers who don’t care about the damage a government shutdown would have on the economy. A number of ideas are floating around, but Dick Morris floated one yesterday in the Hill that is worth considering: phasing in limited debt ceiling hikes that would avoid a government shutdown but would not be enough to allow the president to avoid having to negotiate on entitlement reform and other spending issues.
As Morris writes:
The Republicans should offer to pass a bill now setting a debt limit that rises each quarter pegged to one-third of the revenue growth of the preceding quarter. Thus, two-thirds of all revenue growth — natural or due to tax hikes — would go to deficit reduction.
Republicans are unwilling to pull the trigger on default by refusing to raise the debt limit. But a bill to allow gradual increases in the debt limit, at a pace slower than revenue growth, need not trigger default. Instead, the president would be forced to prioritize his spending and borrowing so as to avoid default, pay the military and send out Social Security checks. All the rhetorical handles he has to battle an effort to kill the debt-limit increase will be gone in the face of a phased-in debt-limit hike.
Critics of the idea can certainly point out that this proposal could turn out to be as ineffectual as Boehner’s Plan B fiscal cliff plan that was dead on arrival in the House and never would have been passed in the Senate or signed by the president. We should certainly expect the president to stick to his refusal to negotiate on the debt ceiling at least initially. But Morris is right that what the GOP needs to avoid is an all-or-nothing approach to the debt that will only make Obama look like the reasonable one in the negotiation, even if his stand is no less ideological than that of his Tea Party foes.
As Pete wrote last week, conservatives need to use the upcoming months to articulate their vision for the country. But so long as they control the House they must use that body’s power of the purse to fight for the principles that the voters expect them to uphold. That requires what Morris calls a “flexible response” to a difficult fiscal and political problem. So long as Republicans are willing to raise the ceiling and avoid the shutdown that Obama believes will only strengthen his hand, they have a chance to win their point. The phased approach may not be perfect, but it is as good a scheme for thwarting Obama’s tax madness as I’ve heard in the last week.