There’s not a lot to like about the “fiscal cliff” deal the Senate agreed to last night. It raises taxes at a time when our economy is still reeling, and it raises spending at a time when the country is running a $1 trillion annual budget deficit and can ill afford it.
It’s a bad deal, and this observer hopes the House rejects it. Going over the “cliff” would be better than this in that we’d at least get significant spending cuts to go along with the tax increases.
But one silver lining is that this deal passed in the House doesn’t raise the debt ceiling. Remember that at one point President Obama was asking for the elimination of congressional debt ceilings altogether, in the form of giving the president unilateral control over it, and Boehner had put on the table a roughly two-year increase in the debt ceiling.
Thankfully neither offer was included in what the Senate passed, which means that by spring the new Congress will have to increase the $16.4 trillion borrowing limit.
Technically the country is hitting the debt ceiling today, but the Treasury is already implementing measures to delay. Those measures are expected to run out by late winter, or early spring.
Either way, a debt ceiling show down is likely to leave Republicans with a stronger position from which to negotiate meaningful reductions in federal spending. And perhaps, if Speaker John Boehner loses his leadership position, with new faces leading the charge.