Using the next fiscal crisis as an opportunity
An ambitious president, or bold centrists in Congress, could take a different route
The most recent debt-ceiling crisis played out pretty much the same way as all others in recent memory: The minority party in Congress begins by making outrageous demands, with the President responding by insisting that he will never negotiate. Eventually, though, despite all of the grandstanding from both sides, they sit down and negotiate a bipartisan deal that disappoints both the far left and the far right. This time, as they typically have in the past, both the leadership and the majority of Congress praise the agreement as a reasonable settlement for both sides - even as they both insist to their base that they won the fight. That reasonable settlement they agreed on, now as in years past, doesn’t really do anything to address the ballooning deficit or rising debt. Instead, it preserves the status quo, allowing both sides to safe face and scamper off with a sigh of relief. That’s why, over the past decade, the United States has had three different government shutdowns and two debt ceiling ‘crises’ that resulted in no real changes.
That’s the exact opposite of the dynamic that should be playing out. It should not be the ideologues on both sides denouncing these deals while the centrists begrudgingly accept them as the cost of doing business. Instead, centrists ought to be outraged at coming so close to calamity without accomplishing anything at all.
These crises, whether real or artificial, ought to be considered the opportune moment to impose the sweeping fiscal reforms that this nation really needs. Joe Biden and Kevin McCarthy certainly had the opportunity to do so this time around; instead, they ran screeching from that kind of leadership, electing instead to simply save their own skin.
Instead of meekly going along with whatever compromise solves the so-called crisis, centrists could - and should - be bold for a change. They could, ahead of the next deadline, come up with a plan to fix the nation’s finances, saving Social Security from bankruptcy and actually reducing the nation’s debt and deficit. In order to do this, they’d need to consider not just ignoring, but slaughtering, the sacred cows of both parties.
The leading politicians in both parties, for instance, have declared virtually any changes to Social Security off-limits - or, at least, any cuts. Joe Biden and Donald Trump have both used their opposition to changing Social Security in any way as an attack line on their opponents, whether in the other party or their own. For Republicans, this is a major shift: George W. Bush once floated an ambitious plan to privatize Social Security. While that went nowhere, many Republicans have remained open to reforms, recognizing that doing nothing is not an option. Sadly, Trump and Biden alike have made doing nothing about Social Security not just an option, but the centerpiece of their 2024 campaigns as they both seek the White House.
Republicans and Democrats alike continue to resist any substantive changes to the tax structure. That’s understandable, as any time any politician even floats changes to it, they end up getting attacked from both sides. That’s not the right approach: Attacking elected officials for considering any major changes, even terrible ones like the FairTax, stifles any serious debate over those issues whatsoever. Rather than serving as the basis for pithy attack ads, we should seriously consider these ideas fairly and then reject them - while simultaneously praising their proponents for their courage. We don’t need to embrace every silly idea that comes along just for the sake of change, but we shouldn’t instantly attack their authors either. They are, at least, willing to offer new proposals, and that’s more than most politicians these days.
So, ahead of the next fiscal showdown, a group of dedicated reformers from both parties could come up with a grand, sweeping plan to fix the nation’s finances and insist it be passed in order to keep the government operating or raise the debt ceiling. Now, they ought to recognize that they won’t get their brilliant ideas all passed in one fell swoop: that’s unrealistic, just as the cuts House Republicans passed were unrealistic. Instead, their proposal would be presented as the opening phase of negotiations in order to secure their support. Importantly, this can’t merely be a charade in order to please their base or grandstand for the press, like so many of these showdowns have been of late. The reformers, no matter what ideological stripes they usually wear, need to be willing to take the nation right to the brink - or possibly beyond it - just as the ideologues so often are.
Now, ideally, they’d have a partner in the White House, regardless of their party, who recognizes fiscal reality and knows that empty pandering isn’t a solution. That could be either a Democrat or a Republican: it just needs to be someone who’s more interested in real solutions than simply retaining their own electoral support. That could well mean that this plan would have to wait to be implemented until any president is in their second term in office, when they become less concerned about politics and more concerned with their historical legacy. Indeed, a true leader in the Oval Office - if we ever end up with one of those again - could initiate the plan themselves, vowing to veto any debt-ceiling increase or federal budget that does not include substantive reforms.
This approach wouldn’t be easy: there are a lot of moving parts to consider, starting with the crafting of the initial policy proposal. That would be difficult enough, but then you’d have to find enough real leaders in both parties willing to stick their necks out and take a chance on it. That could well be pure fantasy in Washington, DC, these days, rendering this entire scheme moot, but it could also well be the only way to save the nation from financial ruin. While the United States is blessed with the world’s strongest economy and the only world’s reserve currency at its command, neither of those are guaranteed to exist in perpetuity. That’s why it’s necessary to act now to fix our finances while we still can.
Another challenge to this scheme, which is in some ways a fiscal policy coup, is that it would have to be exquisitely timed. The policy would have to be crafted, its supporters secured, and then they would have to wait for the right moment to strike. It would almost certainly have to revolve around a number of politicians who weren’t running for re-election, either immediately or ever again. You’d need a president who was at least willing to go along with it, if not actively endorse it, for it to even have a chance. You’d have to move quickly, or the far left or the far right would be able to sink it before it even left dry dock.
While this approach might not be practical or reasonable, doing nothing about our country’s finances isn’t practical or reasonable either. Something, somewhere, eventually will have to give. The only question is whether that something is a series of reforms that saves the nation, thereby preserving our superpower status and the global world order, or a calamitous collapse that would make defaulting on our national debt look like a quiet Sunday stroll.
You may follow Jim on Twitter or Facebook. He is also a weekly political columnist for the Portland Press Herald, Maine’s largest daily newspaper.