A welcome break for Congress — and the economy

September 27, 2013

WITH ONLY a couple of days left before a Sept. 30 deadline, it is anyone’s guess whether Congress will keep the federal government funded and open for business — for another month and a half. That is to say, no one knows whether government will be open on the day, sometime in the second half of October, when a bigger potential crisis rolls around. That’s when the Treasury Department runs out of cash and defaults on U.S. obligations — unless Congress raises the $16.7 trillion debt limit. A government shutdown would be a stupid, self-inflicted wound; default could be a debacle.

The proximate cause of this predicament is the mischievousness of ultra-conservative Republicans. Sen. Ted Cruz (Tex.) and a band of like-minded back-benchers in the Senate and House have launched a spurious and self-interested crusade to “defund” Obamacare, linked to the must-pass spending bill. Their reckless, doomed campaign has thwarted plans by more mainstream Republicans to pass a continuing resolution and avoid blame for a shutdown — so as to stage what they think, probably correctly, is a more winnable battle with President Obama over the debt ceiling.

Mr. Obama and his fellow Democrats have been content to sit back and let the Republicans self-destruct rather than negotiate. Under the circumstances, they have little incentive to do anything else.

The deeper cause of this dysfunction is a profound division between the two parties over the direction of the country — a red-blue gulf that spans everything from health care to taxes to immigration to spending. Only the federal helium reserve seems to enjoy bipartisan support these days. Ideological purists on both sides increasingly dominate intraparty politics, squeezing out moderates and magnifying the interparty gap.

Meanwhile, the economy struggles, burdened by misgovernment in Washington and the uncertainty that it inflicts on investors and workers alike. Americans need a feasible alternative to the partisan deadlock in Washington. At this point the best that might be hoped for could be an extended timeout, to give the economy a respite while politicians regroup and, one hopes, calm down.

On Friday, three former elected officials offered a plan to do just that. Under the auspices of the organization No Labels, former Utah governor Jon Huntsman (R), former Indiana senator Evan Bayh (D) and former Virginia representative Tom Davis (R) unveiled a “Jobs First” proposal that would essentially freeze the tax and spending policies over which the parties are battling until the unemployment rate hits 6.5 percent. Obamacare, the sequester — the whole bundle, imperfect as it is, would remain in place, accompanied by a suspension of the debt ceiling. No more cliffhangers every few months.

The No Labels trio likens it to a battlefield truce; a civilian analogy would be the cooling-off period to prevent a labor dispute from becoming a strike. Negotiations, or arguments, can go on. But the enterprise — in this case, the federal government — keeps operating, with no collateral damage.

There are obvious objections, from the prosaic (how to reduce such a plan to binding legislation?) to the political (why would Republicans and Democrats be likelier to agree to this than any of the other compromises that have failed thus far?). Still, the deal requires total surrender from no one: Republicans keep the sequester’s spending cuts while avoiding the risk of blame for a shutdown; Democrats keep Obamacare while avoiding a tough stand-alone vote on the debt ceiling for red-state senators.

The American people would get the economic benefits of an extended period free of political drama. If there’s any validity to the Federal Reserve’s latest forecasts, in which unemployment will reach 6.5 percent in 2014, the respite would last through the 2014 election. Then a new Congress, with a fresh mandate, could resume the battle.



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