When it comes to the perennial fight to raise the federal debt ceiling, it’s usually best to assume that the struggle to give the Treasury Department clearance to actually pay the debts that the federal government has already incurred will play out in the worst way possible short of actual default. However, with a September deadline approaching, there continue to be promising signs that the issue may not devolve into the partisan battle that has typically raged around it in years past.
In recent weeks, one of the key players in the debt ceiling debate, House Freedom Caucus Chairman Mark Meadows, has made it plain that he and his fellow budget hawks are not interested in replaying former debt ceiling dramas that have led to downgrades on the federal debt and a very nervous stock market.
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In an interview with The Fiscal Times last month, Meadows even indicated a preference for getting the debt ceiling issue behind us while it was still July. That hope has obviously faded by now, but in remarks on Wednesday he laid out an even stronger position in favor of raising the debt limit without any complicating factors other than steps aimed at reducing the budget deficit.
That would appear to exclude things like payment prioritization schemes -- something he has championed in the past -- and other gimmicks that would allow lawmakers to claim that the Treasury has continued to pay its debts, even as economists refer to it as “default by another name.”
To be sure, Meadows’s desire to see budget-cutting measures in a debt ceiling bill could complicate passage, depending on what the members of his caucus decide they are willing to tolerate. But on Wednesday, the Freedom Caucus chairman went out of his way to assure the financial markets that the plan is not to initiate another knock-down, drag-out fight like those of years past.
“I don’t believe we should play around with the full faith and credit of our country -- I’m bullish on getting it done,” he said. Addressing the bond markets specifically, he said, “I don’t see us going beyond September, so if they’re trading and factoring that in, I think they’re making assumptions based not on the political reality of what’s going to get done.”
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The news should cheer other budget hawks who, while they view the rising federal debt with dismay, are even more horrified at the prospect of a federal default.
In a statement released Tuesday, Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said, “We need to increase the statutory debt limit as soon as possible. We should have done so already to avoid creating undue and potentially costly uncertainty, and we most certainly should not wait until the last moment to make this necessary increase. No Member of Congress should even consider holding this must-pass legislation hostage.”
