Harry Reid hasn't lost it yet folks, the Democratic Senate Majority Leader announced today that he wants raising the debt ceiling to be part of any deal that resolves the fiscal cliff situation.
We would be somewhat foolish to work out something on — stop things from going over the cliff, and then a month or six weeks later Republicans pull the same game they did before and say … unless this happens, we’re not going to increase the debt limit.
Reid is recalling 2011, when Tea Party Republicans refused to back down on their demands for major cuts to balance an increase in the debt ceiling limit, and, for the first time in history, the U.S. government defaulted on its loans and received a credit downgrade from the ratings agency Standard and Poor. There is no reason they wouldn't do all of that again when the debt ceiling will need to be raised in early 2013.
So, what is the debt ceiling, and why do we keep raising it?
The debt ceiling is a fabrication. While congress can limit how much the government spends, raising the debt ceiling merely allows the government to actually write checks for the committments it has already made. It is little more than a procedural artifact that minority parties have used to draw a few minor concessions. Some have argued it should be abolished.
The debt ceiling has always been something that the minority party hemmed and hawed about raising, often voting against it (including President Obama when he was a senator), but never actually preventing it from being raised. The Tea Party Republicans that stormed into office in 2010 really were different from your average Republican. They really did have no desire to compromise. In years past, with a more collegial congress, this wouldn't have been so much of an issue. Now Reid knows what he is up against, and he is taking pains to avoid last year's painful fight.