Republicans in Congress will gain little by insisting against a debt-limit increase without steep spending cuts, says Keith Hennessey, director of the National Economic Council under President George W. Bush.
The GOP would take the heat for the calamity that would ensue after President Barack Obama rejected its stance, Hennessey, now a business and law lecturer at Stanford University, writes in The Wall Street Journal.
“There is, however, a strategy to change the political dynamic and put pressure on congressional Democrats and the administration,” he says.
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Obama wants a steep increase in the debt ceiling — either no limit at all, or a five-year increase of trillions of dollars. “His obvious goal is to punt the issue past the 2014 mid-term election,” Hennessey says.
So Republicans in Congress should offer Obama a choice, Hennessey says. “He can have a long-term debt-limit increase if he agrees to cut spending, or he can have repeated, short-term increases without spending cuts,” he writes
“If the president continues to dodge the country's long-term spending problem, the solution is to force him to ask Congress every few months to give him the authority to borrow more while facing questions about why he refuses to restrain spending.
Former Federal Reserve Chairman Alan Greenspan told CNNMoney last year that the best approach to the debt ceiling it to “repeal it.”
The debt limit is an anachronism from 1917, enacted because prior to then every individual debt issuance by the federal government required some form of congressional approval, Greenspan says.
“That’s the same debt ceiling we’ve had ever since.”
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