The bill, which narrowly passed the House with 218 Republican votes and none from Democrats, would allow the government to keep borrowing only until November or December and then require both the Senate and the House to pass a balanced budget amendment to the Constitution before the limit could be raised again.
That’s right, in a bid to win over his recalcitrant caucus, Speaker John Boehner agreed to go through all of this again in just a few months — and then hold the country hostage to passing an amendment that will never get the two-thirds of each chamber that it would need. The bill was, as it should have been, promptly dismissed by the Senate.
Now the only hope left for avoiding default on Tuesday is for the Senate to piece together a compromise that can pass with bipartisan majorities in both chambers. It will undoubtedly cut far too much, at a time when the economy can’t afford it. It will contain no needed revenue increases and could still trigger a downgrade. But it would eliminate the imminent threat of financial chaos.
For six months, House leaders catered to their Tea Party members, perhaps hoping that they could turn them to a reasonable path, or at least count on their votes in a clinch. That wish crumbled on Thursday night. At least two dozen Republicans, mostly freshmen, adamantly refused Mr. Boehner’s pleas to support his bill — his last shot at keeping the House’s positions relevant.
Instead of worsening the bill, Mr. Boehner could have negotiated with Democrats to construct one with a chance of resolving the standoff and passing in the Senate. But concerned largely with preserving his position, he gave in to the very lawmakers who have been insisting for weeks that the Obama administration is lying about the coming default. That argument alone should have given him pause about giving in to their demands.
The Senate quickly tabled the revised House bill. The legislation being prepared by Harry Reid, the majority leader, would raise the debt ceiling through March 2013. That avoids another showdown, and potential meltdown, in the middle of the crucial retail shopping period and at the start of the presidential campaign cycle, when Washington will be even less open to rational compromise.
The bill would cut the deficit by about $2.4 trillion over the next decade. Unlike the House bill, it spares Medicare, Medicaid and Social Security from benefit cuts, and counts the drawdown of troops from Iraq and Afghanistan as part of its savings, easing the burden on domestic programs. Unfortunately, it surrenders to the unrealistic Republican demand of no new revenues, cutting too much spending at a time when the economy is still in serious need of government help.
Mr. Reid is negotiating with Republicans on their demands for an enforcement mechanism to make sure the deficit cuts take place in the later years of the deal. Both parties envision a bipartisan panel that could recommend cuts; if those are not adopted, some kind of automatic cuts would go into effect. This automatic knife can be dangerous, arbitrarily cutting without regard to economic circumstances. Democrats should insist that taxes and revenues are not ruled out as a way to lower the deficit.
The House planned a deliberately obstructionist vote on Saturday against the Reid bill, but some Senate Republicans are signaling they are willing to agree to this more reasonable framework. If enough of them can join the Democrats and ignore the bleats of the Tea Party, it may still be possible to avert calamity.