Earlier Charlotte wrote about how frustrated poor Harry Reid is about the progress of negotiations about the debt ceiling. But somehow the Senate Majority Leader doesn’t seem to think that Democrats should have to offer an actual proposal of their own. It’s Democrats’ job, apparently, just to be consistently “frustrated” by Republican proposals, rather than offer solutions of their own.
The press seems to miss the irony in this, and the absurdity of their depiction of the President as the “leader” or “grown-up in the room” in this process, when in fact the President and Democrats have been little more than spectators and critics.
I wanted to point out one more bit of annoying political posturing in this debt ceiling debate. Politico reports that Reid and company are pretending that their desire for an extension that lasts beyond next year’s election isn’t just for raw political purposes (which it clearly is, as Charlotte also discussed), but is strictly motivated by their desire to reassure the world financial community of the U.S. credit worthiness. Here’s how Politico explained Democrats’ objects to a GOP two part plan, which would start with a short-term debt limit increase coupled with spending cuts, and then move to a more comprehensive process with a committee coming up with more significant cuts along with another debt ceiling increase:
To make deeper cuts in the next 10 years, the two-step proposal would create a new special committee of lawmakers who would recommend by the end of 2011 a more robust series of deficit-reductions. Republicans wanted to tie the success of that committee to the second debt-limit increase, an idea that Pelosi, Reid and Obama firmly rejected.
“That means we’ll be right back where we are today a few months down the road,” said a Democratic aide. “We are not a banana republic. You don’t run America like that.”
With rating agencies warning about downgrading the United States’ credit, which could lead to a surge in interest rates and a shock to the markets, Democrats say a longer-term extension is critical to soothe the world economy.
Is a debt limit increase that lasts beyond November 2012 really what the world economy is looking for? Will that really make our creditors and credit rating agencies feel better about the long-term prospects of our country?
No. Because while certainly the financial markets don’t like the uncertainty created by the possibility of the U.S. hitting its debt limit, the underlying concern isn’t the debt ceiling, but the ballooning U.S. debt itself. That’s why credit rating agencies were considering downgrading the U.S. debt long before the debt ceiling became the issue. The world financial markets want us to get our addiction to over-spending under control, not to just increase the cap on our national credit card so that the spending spree can continue.
Democrats want a long-term debt ceiling increase because they don’t want the public reminded again before the election how Washington is spending our country into oblivion. Credit ratings have nothing to do with this contrived time-line.