Fight Isn't About a Ceiling, It's About the Debt

Fight Isn't About a Ceiling, It's About the Debt

America faces existential fiscal and economic challenges. Federal, state, and local governments face tens of trillions in unfunded liabilities. The economy seems to be undergoing a structural transformation which is experiencing almost no growth, even after trillions in government stimulus. Washington’s response to this is to go very “small ball” and debate extremely narrow slices to avoid discussing the root of the problem.  

The problem for Washington is that the public is wising up to the act. 

For lawmakers in DC, the solution to the current budget stand-off is some à la carte mix of policy proposals. Do we lift the debt ceiling for a few months or a year? Do we include spending cuts or reforms? Is it a “clean” CR or do we include a package of small measures? Do we use “budget control act” levels or find a way to replace “sequestration?” 

All of this is intentional. The public, wisely, doesn’t understand any of this or the host of acronyms, legislative rules and procedures and, frankly, gooblygook that dominate Washington salons. The public does understand the challenges facing the country, though. Washington’s seeming inability to confront these challenges is driving American’s frustration and anxiety. 

In Washington, the debate is about on what conditions we accumulate more debt and for how long a period of time the government can continue its borrowing spree. Talk in Washington is now focused on whether or not to “separate” the “CR” from the debt ceiling, and which is going to be “clean” or have conditions. For the public, the debate is about the debt itself, all $17 trillion of it. They worry about that. What is Washington doing about that? 

While the media assume that the GOP will be “blamed” for the current standoff, polls show the public blames pretty much everyone in Washington. While it rushes to report bad poll numbers for Republicans, it fails to note that over 60% of Americans disapprove of Congressional Democrats and Obama’s approval numbers have sunk to 37%. For the media, polls showing low approval ratings for Congress are a priori about the House GOP, ignoring the fact that Congress also includes the likes of Nancy Pelosi and Harry Reid.

The media and DC establishment also like to finger the Tea Party as the blame for the standoff, not understanding that the Tea Party movement did not start with the election of Barack Obama. The current branding did, but the movement started during the Bush Presidency. 

It started with disgust at the free-spending ways of Bush and the Republican Congress, the creation of a new entitlement program, and the TARP bank bailout. The current grass roots activist movement began with “Porkbusters,” borne of outrage over the abuse of Congressional earmarks.

We’ve had three “wave” elections in the last four cycles. That is an extraordinary amount of political volatility. There is nothing to suggest that voter anger is abetting either. Indeed, there are clear signs another wave is building, perhaps, but not in the way the media envision.

In the coming weeks, Washington will find some solution to the current impasse. The bubble-gum and duct-tape, however won’t change the fact that our nation’s debts and liabilities are impossible to pay in full. Nor will it change the fact that, in the world’s biggest economy, half the national income is made up of transfer payments from government to individuals. 

For decades, the public has been ill-served by its politicians and the media. No matter what happens in the coming weeks in Washington, a reckoning is coming.