Turning the tide on debt

The standoff over extending the national debt ceiling has been maddening and mind-boggling, with one proposal after another biting the dust, leading to an increasing sense of panic that has not been good for markets.

But House Republicans have been right to hold their ground and resist relentlessly increased spending as much as possible while attempting to extend the debt ceiling before an Aug. 2 deadline and pressing for long-term efforts at curbing federal spending.

The “cut, cap and balance” proposal, for instance, included a provision aimed at reaching an eventual balanced budget amendment. That’s commendable, considering that Montana and many other states have balanced budget requirements, but the legislation died in the Senate.

The biggest difference between the remaining plans — surprise! — is politics. Senate Democrats are proposing $2.2 trillion in cuts over the next decade, but they want to extend borrowing authority through 2012, which would effectively put the budget battle away until after the election to the benefit of President Barack Obama.

House Speaker John Boehner’s plan seeks about $1.2 trillion in spending cuts over the next decade, but it extends borrowing authority only through next February, and it would task a congressional committee to come up with $1.8 trillion more in cuts by the time borrowing authority expires. This would keep the issue front-and-center and keep political heat on the president prior to next year’s election.

The good news is that this frustrating debate has been shifting in the correct direction, so that curbing Washington spending has now become the sole focus.

True, President Obama in his most recent televised address repeatedly called for a “balanced” solution (translation: spending cuts and tax hikes) and he repeatedly spoke of the need for a reasonable “compromise.” But he now appears to be the only one still talking about tax hikes — the Senate plan has no provisions for them, because congressional Democrats apparently recognize that anything resembling an increased burden on taxpayers will not clear the House.

That reality was a no-brainer weeks ago, when we wrote on these pages that even if House Republican leaders leaned toward some form of increased taxes, their caucus would not go along with it. And that was confirmed this week, when conservative Republicans were even rebelling against Boehner’s plan, saying it doesn’t go far enough in cutting spending.

Finally, let’s say a word about the president’s push for a compromise. For decades now, compromise has meant Republicans capitulating and even colluding with Democrats for more federal spending. The relentless expansion in this direction, particularly in the last two years, has created the biggest spending government with the biggest national debt in Earth history.

If there is going to be a compromise, it has to be between big-spending government and the over-burdened taxpayers who are funding the federal colossus, not between two political parties which both want to curry favor with voters by funding pet projects.

The tide has started to turn on the conventional wisdom that the federal government can only get bigger. Thank goodness.