Congress Should Pass Boehner's 2004 Debt Ceiling Deal
While the federal government remains shuttered over Republican demands to defund the Affordable Care Act, the United States faces the growing prospect of its first-ever default. If Congress does not increase Uncle Sam's borrowing authority of $16.7 trillion by October 17, experts like former Bush Treasury official Tim Bitsberger warn, the resulting global economic cataclysm "would blow Lehman out of the water."
So here is a modest proposal to end the debt ceiling impasse and avoid what House Speaker John Boehner predicted "would be a financial disaster, not only for our country but for the worldwide economy."
Congress should pass a "clean" debt ceiling increase with no conditions attached that pushes out the next deadline beyond the 2014 midterm elections next November. With the Congressional Budget Office (CBO) forecasting this fiscal year's deficit at $560 billion (less than half the level when Barack Obama first took the oath of office), an $800 billion debt limit hike would more than do the trick.
There's no reason John Boehner and Mitch McConnell shouldn't go along. After all, in November 2004, that's the same debt ceiling bill they and the Republican majorities in the House and Senate sent to President Bush
On Sunday, Speaker Boehner took to the airwaves to once again demand a ransom for the debt ceiling that had been routinely raised 42 times since 1980. As the New York Times reported Boehner's tough talk on the Sunday shows:
"We're not going to pass a clean debt-limit increase."
"I told the president, 'There's no way we're going to pass one,' " he added. "The votes are not in the House to pass a clean debt limit. And the president is risking default by not having a conversation with us."
Unless, that is, the president involved is a Republican.
As it turns out, a clean debt ceiling bill exactly what then House Speaker Dennis Hastert and future Speaker John Boehner gave Republican President George W. Bush in November 2004. That October, Bush called for his fourth hike in the nation's borrowing authority. His Treasury Secretary John Snow warned, "Given current projections, it is imperative that the Congress take action to increase the debt limit by mid-November," adding that his arsenal of fiscal tools, including tapping money intended for the civil service retirement fund, "will be exhausted."
Boehner's predecessor made it clear that President Bush had nothing to worry about. As the Washington Post recounted that October:
"Typically with Congress, they do it when they need to do it," said John Feehery, spokesman for House Speaker J. Dennis Hastert (R-Ill.). "And we'll do it when we need to do it."
And do it they did. But as the New York Times explained on November 17, 2004, Bush had to wait for his debt ceiling increase for a very simple reason:
Though an increase in the debt ceiling was never in doubt, Republican leaders in both houses of Congress postponed action on it last month, until after the elections, to deprive Democrats of a chance to accuse them of fiscal irresponsibility.
The ironies in that 2004 debt limit expansion didn't end there. Democrats rightly "noted that Bush's 2001 budget anticipated the debt ceiling would not have to be raised until 2008." By the time Bush left office in January 2009, the U.S. national debt had nearly doubled. And as it turned out, As it turned out, John Boehner, Mitch McConnell, Eric Cantor along with Speaker Hastert and Senate Majority Leader Bill Frist needed to enable President Bush to borrow more money to pay for a massive new health care program.
That's because they added another budget-buster to Bush's ledger in December 2003, the Medicare prescription drug benefit. And, as I noted previously, it was a doozy:
Within two months of signing the Medicare Modernization Act (MMA) into law, President Bush quietly informed Congress that the true cost of the program would be $550 billion, not $395 billion, over the next decade. When Medicare actuary Richard Foster sought to present the true price tag to Congress in late 2003, then agency chief Thomas Scully threatened to fire him. By the time the program was launched in 2006, the estimated 10 year price tag for the Medicare prescription plan had increased to $720 billion.
Ultimately, the costs of the initially unpopular Part D program came in closer to the original forecast. But as Ezra Klein detailed, that was primarily due to the greater use of generic drugs and the lower rate (77 percent versus 93 percent) of enrollment by America's 43 million Medicare recipients. Regardless, Bush, Boehner and company never raised a single penny of new revenue to fund a program that needlessly enriched private insurers and pharmaceutical firms at Uncle Sam's expense. Unlike the fully-funded Affordable Care Act now, it all went on America's credit card. As Senator Orrin Hatch acknowledged in 2009:
"It was standard practice not to pay for things."
It has also been standard practice to raise the debt ceiling, something both parties have routinely done a combined 42 times since 1980. With the dramatic improvement in the near-and-mid-term debt forecast and the federal government's annual deficits plummeting to half the level Barack Obama inherited when he first took the oath of office in January 2009, there is no reason to attach any conditions a debt ceiling hike. Speaker Boehner had it exactly right in March when he acknowledged:
"We have no immediate debt crisis."
And as Boehner's budget man Paul Ryan admitted two years ago, "You can't not raise the debt ceiling."
Unless, Republicans now insist, a Democrat is in the White House.