Trump’s Nixon-to-China idea on the debt limit

USA TODAY US Edition - - NEWS - Bruce Bartlett Bruce Bartlett was a Trea­sury of­fi­cial dur­ing the Ge­orge H.W. Bush ad­min­is­tra­tion. His lat­est book, The Truth Mat­ters, will be pub­lished in Oc­to­ber.

I ad­mit that I’ve had noth­ing good to say about Don­ald Trump since he be­came pres­i­dent, but that could change. Ac­cord­ing to news re­ports, he is plan­ning to abol­ish the debt limit. It’s a bud­getary anachro­nism that does noth­ing to re­strain the growth of debt and that threat­ens de­fault when it isn’t raised in a timely man­ner, roil­ing fi­nan­cial mar­kets and rais­ing the cost of bor­row­ing.

It is a pre­cisely cor­rect anal­ogy to say that fail­ure to raise the debt limit is equiv­a­lent to re­fus­ing to pay your credit card bill. The bill sim­ply rep­re­sents fi­nal pay­ment for goods and ser­vices pur­chased pre­vi­ously. The spend­ing al­ready took place, the debt was al­ready in­curred. To protest one’s own in­debt­ed­ness by fail­ing to pay the bill is ir­re­spon­si­ble at best and crim­i­nal at worst.

The pres­i­dent can­not spend a sin­gle penny un­less Congress per­mits it. If there is a bud­get deficit, it is be­cause Congress wanted one. It is as if Congress gave the pres­i­dent its credit card and told him to buy cer­tain things — med­i­cal care for el­derly Amer­i­cans, arms for our sol­diers, roads and bridges and so on.

The pres­i­dent bought those things as Congress told him to — it’s against the law for the pres­i­dent not to spend money ap­pro­pri­ated by Congress. But when the bill came due, Congress was shocked that debt had been in­curred. Pro­claim­ing ev­er­last­ing fidelity to fis­cal re­spon­si­bil­ity, many mem­bers of Congress refuse to pay the bills that re­sulted from their own ac­tions.

It is pos­tur­ing in the ex­treme for mem­bers of Congress who voted for that spend­ing to later vote against fund­ing it on the grounds of fis­cal re­spon­si­bil­ity. Fail­ure to raise the debt limit is in fact the most fis­cally ir­re­spon­si­ble act imag­in­able.

Although the idea that both of our ma­jor po­lit­i­cal par­ties are equally ir­re­spon­si­ble is grossly over­stated in po­lit­i­cal con­ver­sa­tions, it is un­ques­tion­ably true in the case of the debt limit. As a prac­ti­cal mat­ter, the party hold­ing the White House has re­spon­si­bil­ity for rais­ing it. Thus the hypocrisy shifts back and forth. For ex­am­ple, as a sen­a­tor, Barack Obama de­nounced rais­ing the debt limit un­der a Repub­li­can ad­min­is­tra­tion. Later, as pres­i­dent, he was forced to ar­gue against his own po­si­tion a few years ear­lier.

The debt limit needs to be abol­ished, but re­al­is­ti­cally only a Repub­li­can can do it be­cause the GOP is more heav­ily in­vested in the idea of a bal­anced bud­get — even if its ac­tions, es­pe­cially on tax cuts, re­peat­edly be­lie its words. Thus, just as only the Repub­li­can Richard Nixon was able to open the diplo­matic doors to then-Red China pre­cisely be­cause he had a rep­u­ta­tion for be­ing anti-com­mu­nist, and lib­eral Demo­crat Bill Clin­ton was able to re­form wel­fare, so too only a con­ser­va­tive Repub­li­can pres­i­dent can get rid of the debt limit.

Whether Trump fol­lows through re­mains to be seen. But if he does, he will have done a very good thing for which he de­serves credit — and the undy­ing ap­pre­ci­a­tion of ev­ery Trea­sury sec­re­tary in his­tory.

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