Since 2001, Switzerland has had such a “debt brake” that caps expenditures at revenues with business cycle adjustments. Automatic spending sequesters (ideally in combination with hard caps on tax expenditures) could kick in if unemployment is low and deficits are high-avoiding the pro-cyclical adjustments that Gramm-Rudman-Hollings caused. Second, we could put automatic spending-control mechanisms into place that are directly sensitive to the business cycle. We could require leaders from both parties to provide explanations-indeed, as long as we’re at it, why not make it a statutory requirement to offer the outlines of a plan that consists of something other than “wait for the voters to give my party complete control of government”? Such requirements are unlikely to have a huge impact, but they might improve deliberation about the debt. New Zealand’s Treasury Minister is required to provide such an explanation whenever debt deviates from “prudent” levels. Boehner, Tear Down This Ceiling”.įirst, we could require legislative leaders and the President to provide formal explanations of distressing deficits. If fiscal conservatives want to install some new mechanisms designed to promote spending discipline, here are a few they could consider, drawn from my January Brookings White Paper, “Mr. President Obama’s Treasury Department favors this course, and apparently Senator Schumer will soon propose legislation to this effect. That would pretty well neuter the debt ceiling, and would be an acceptable result. Past versions of the McConnell Rule (20) are time-limited, but it would be simple to adopt it in perpetuity. Basically, all of the anti-debt speechifying would still go on, but the President would get to raise the limit unless two-thirds of both houses of Congress opposed him. It says that the President may raise the debt ceiling a certain amount unless Congress passes a joint resolution disapproving the raise, which the President would then have a chance to veto. The McConnell Rule, devised by the Senate Minority Leader in 2011, is a sort of formal acknowledgement of the rhetorical character of the debt ceiling. In our current age of broken budgets, though, we would need to ensure that the rule would cover all continuing resolutions, too. That makes sense, since it indicates a sensible recognition that deficit spending requires issuing more debt. It dictated that whenever the House passed its annual budget, the debt ceiling would be automatically deemed raised a corresponding amount. The Gephardt rule was a 1979 innovation of the Missouri Congressman that helped minimize the impact of the debt ceiling until it was waived in 1995. The easiest ways of doing that would be to formally legislate either the Gephardt Rule or the McConnell Rule. We should absolutely start by getting rid of the debt ceiling. Debt ceiling brinkmanship serves all Americans badly, fiscal conservatives worst of all. In my article over at National Review Online, I argue that the benefits of the debt ceiling are illusory and the costs are all too real, even if improbable. Philip Wallach, in an extension of his article at National Review, argues that there are more effective policy alternatives to the debt ceiling. The Lessons from the Shutdown Series examines the costs and consequences of the recent shutdown and debt ceiling fights.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |