After the country flirted with an unprecedented default on its obligations this week for the second time in three years, Sen. Barbara Boxer is pushing a proposal to eliminate the debt limit as a bargaining chip.
A bill by Boxer, a California Democrat, would allow the president to request a debt limit increase, and only a veto-proof majority in both houses of Congress could stop it. The measure would allow members of Congress to voice their disapproval and tell their constituents they voted against increasing the debt limit.
Boxer’s bill hasn’t attracted any co-sponsors yet. The White House says the authority to raise the debt limit rests with Congress. But the public is running out of patience. Congress is about as unpopular as it’s ever been. Business and world leaders worry that the fiscal fights could send the U.S. and global economies into a tailspin.
In an interview, Boxer said her bill is a solution.
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“It is the obvious way out,” she said. “America is so bruised by this.”
Boxer’s bill, the USA AAA Credit Restoration Act, is actually based on a Republican idea: Senate Minority Leader Mitch McConnell proposed it as part of the 2011 Budget Control Act. The Kentucky Republican, usually one of President Barack Obama’s most outspoken critics, helped broker a compromise this week to end a 16-day government shutdown and raise the debt limit.
But the deal only extends the U.S. Treasury’s borrowing authority through early February, and just the possibility that the country could near default again risks U.S. creditworthiness.
“If anyone thinks this brinksmanship is helping the nation, just look at the ratings agencies,” Boxer said.
Fitch Ratings on Tuesday put the U.S. on “rating watch negative,” a step toward a credit downgrade. The disarray in Congress “dents confidence in the effectiveness of the U.S. government and political institutions, and in the coherence and credibility of economic policy,” Fitch wrote.
Standard & Poor’s took away the country’s coveted Triple-A rating during the last debt-limit crisis.
In 2011, the most conservative Republicans in the House of Representatives, emboldened by midterm election gains, refused to increase the debt limit unless they got major spending cuts. They prevailed, and Congress approved the Budget Control Act at the last minute before a default.
This time, the debt-limit deadline coincided with the government running out of funds to operate, with House Republicans demanding changes to Obama’s health care law, his signature achievement. Though they didn’t get what they sought, another budget crisis could occur in a few months.
“Some in Congress want to use the debt ceiling to extract ideological wishes,” Boxer said. “The budget process is the way to handle your whole wish list.”
G. William Hoagland, a senior vice president at the Bipartisan Policy Center who participated in several budget deals in the 1980s and 1990s as a Republican Senate aide, said he’d prefer that Congress repeal the debt-limit law.
But since that isn’t likely, he said, Boxer’s plan could work.
“I think that makes good sense,” Hoagland said. “It’s a good way to get it out of the debate.”
Boxer said her bill creates a more predictable and expedited process for increasing the debt limit.
“I think it’s fair to all branches,” she said. “I would hope that it would be embraced.”