Krauthammer Solution to Debt Ceiling Crisis

Charles Krauthammer, conservative sage, is the person who is today to Republican leaders what Walter Lippmann (1889-1974), Scotty Reston (1909-1995), and David Broder (1929-2011) were in succession to the liberal establishment. Now Krauthammer is telling anyone who will listen that House Republicans should advance to the Senate a bill that raises the debt ceiling only $500 billion, but matches the ceiling increase with $500 billion in spelled-out spending cuts.

Washington should then use the five months relief such a debt ceiling increase provides to negotiate more comprehensive tax reform, one that lowers rates while closing loopholes. Krauthammer is silent on whether or not he would accept tax increases as part of the later agreement, but his short-term plan contains no tax increases.

A likely solution?

James C. Capretta, 2001-04 associate director of the Office of Management and Budget, writes a National Review article generally sympathetic to the House Republicans’ efforts to cut spending. But even Capretta ends up cautioning the House Tea Party faction that the debt ceiling will have to be raised. It’s significant that without naming Krauthammer, Capretta fully endorses the Krauthammer recommendation:

The conservatives in the House who say they will never, ever vote to increase the debt limit need to realize they are handing all of the leverage to President Obama. To begin with, the budget they support — the Ryan budget that the House Republicans voted for nearly unanimously in April —requires a large debt-limit increase. Indeed, there’s no conceivable budget plan out there that doesn’t require one. Moreover, there is a strong chance that going past August 2 without an increase could completely backfire on the GOP.

[Conservatives] should move immediately to pass a small debt-limit increase, on the order of $500 billion, coupled with a reasonable set of spending cuts, including caps on discretionary spending. They should then send that to the Senate as the starting point for discussions. . . at this late stage, there’s a very real chance it would become the vehicle for getting past August 2.