Why Keith Hennessey’s Debt Ceiling Plan Doesn’t Make Sense

Keith Hennessey proposed a debt ceiling plan for republicans, which wisely begins by saying not increasing the debt ceiling makes little sense. However, he goes on to say the following:

Congressional Republicans offer Mr. Obama a choice. He can have a long-term debt-limit increase if he agrees to cut spending, or he can have repeated, short-term increases without spending cuts. If the president continues to dodge the country’s long-term spending problem, the solution is to force him to ask Congress every few months to give him the authority to borrow more while facing questions about why he refuses to restrain spending.

If Hennessey thinks Republicans don’t have leverage this time around, why should they have any leverage for any future extensions? If they never will have leverage, it stands to reason that the President doesn’t need to give anything up. Maybe I’m underestimating the cosmetic issues regarding yes votes for routine debt ceiling increases, but it really doesn’t seem like Republicans have much leverage now or in the future on this issue.

About ozidar

I'm an Assistant Professor of Economics at the University of Chicago Booth School of Business and a Faculty Research Fellow at National Bureau of Economic Research. You can follow me on twitter @omzidar. http://faculty.chicagobooth.edu/owen.zidar/index.html
This entry was posted in Uncategorized and tagged , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s