Is A Debt Ceiling Deal In the Works?

For once, I hope Harry Reid is right: he says he is not close to a deal with the Republicans to raise the debt ceiling.

The hysteria currently in the air is ridiculous. There is no prospect of a default on Treasury obligations. The federal government takes in much more money than it needs to pay principal and interest as it falls due, so default is impossible unless Barack Obama specifically orders it for political reasons. So, let’s start by drawing a deep breath and relaxing.

Worst case, Congressional Republicans should agree to the “clean” bill to raise the debt limit, with no strings attached, that Obama originally said he wanted. Far worse than an increase in the debt limit would be a bad bargain that skews fiscal policy for years to come. When was the last time Republicans came out on top in a midnight, back room deal? For that matter, when was the first time? I’m not sure it has ever happened. Today, Senator Jeff Sessions said:

One thing every American should know: the level of spending cuts currently being discussed is only a small step. It will not change the debt course we are on. The Republican House has passed several measures, including a historic budget, which would have changed our debt course. The Democrat Senate rejected the House budget, refused to present a plan of its own, and has failed to adopt a budget for 822 days.

Ultimately, a solution is more difficult to achieve as a result of the president’s current focus on his re-election, as evidenced by his recent statement that “the only bottom line I have is that we have to extend this debt ceiling through the next election, into 2013.”

The president thinks it’s about him. It’s not. It’s about America.

Now, in the 11th hour, having totally surrendered the public legislative process, Congress is at the mercy of one last round of closed-door meetings that we can only hope will produce a minimally acceptable result.

Congressional leaders, like diplomats, tend to have one terrible failing: they yearn to be deal-makers. Every successful businessman knows that no deal is better than a bad deal. Here, as in som many other areas, politicians should learn from them.