On October 17, the United States will default on its debt for the first time. America will lose its pristine credit rating and taxpayers will suffer billions of dollars of borrowing cost increases. World markets that trade trillions of assets priced on Treasury rates will gyrate wildly, and the intangible and invaluable status of the federal government as the world’s most reliable investment will end. At least—if we are to take the Republican leadership at their word—these will be the consequences if President Obama and the Senate do not agree to accept a full slate of Republican demands in exchange for a hike in the debt ceiling.
In 2011, the last time the Republican Party manufactured a potential fiscal catastrophe, they demanded budgetary cuts to offset the proposed debt ceiling increase. Although we oppose any politicking with the credit of the United States, as Washington Post writer Ezra Klein has noted, there was some basic logic to their call for budget cuts. One could argue that they had received a mandate in the 2010 elections to reduce the deficit, and the raising of the debt ceiling afforded a moment of leverage to do so. This year’s demands, however, are hardly comprehensible as anything other than the worst kind of political blackmail. Aside from insisting on a delay in the implementation of the Affordable Care Act, the Republicans also demand that the president set a deadline for tax reform, approve construction of the Keystone XL pipeline, increase offshore oil drilling, and block most federal environmental regulations, including regulation of greenhouse gas emissions.
The threat of debt default has never before been used to coerce any branch of government into accepting a full minority policy program. This endeavor is made all the more indefensible by the fact that the proposed demands so closely track the Romney-Ryan platform that was repudiated by voters last November. If the Republican Party wants to see its policies implemented, they ought to focus on winning elections rather than threatening irreversible financial and reputational harm to the country they serve. This tactic is fundamentally contrary to the spirit of public service; no political party should threaten financial disaster against its own nation in order to achieve any political goal.
To threaten a government shutdown, on the other hand, is a regrettable but tolerable element of politics. Media-starved members like Senator Ted Cruz can have their 21 hours of fame, for the scale of harm caused by disrupting government activity pales in comparison to that of weakened national credit.
However, no political minority ought to be able to demean the credit of the Federal government, on which we all depend, to win a political battle or two. For a small faction to wield such extraordinary power over the elected majority would be, in the words of Alexander Hamilton, “to substitute the pleasure, caprice, or artifices of an insignificant, turbulent, or corrupt junto, to the regular deliberations and decisions of a respectable majority.” Credit such as that held by the federal government takes centuries to build and only moments to destroy. It will be a tragic day in America indeed if the whims of a cadre of House politicians discredit us all for a long time to come.