debt ceiling

Sunday, May 19, 2013, was one of the saddest and most notorious moments in the sordid history of the federal budget.

Let's start from the beginning.

It's December 2012 and House Republicans are facing a number of politically very difficult and unpalatable choices because taxes will go up automatically on January 1, the sequester will go into effect on January 2 and the by-now- commonplace-but-still-called "extraordinary" measures the Treasury has been using for several months to deal with the problems caused by not raising the debt ceiling are about to be exhausted.

The tax problem was dealt with by agreeing to a smaller increase than was set to happen under current law and then blaming the White House for it. The sequester was postponed until March 1 when both the GOP and the administration thought that the threat of cuts to domestic and military programs, respectively, would cause the other to back down.

But it was the unique and disgraceful way the debt ceiling was handled that deserves the scorn.

What do you call the effort that will be made in the House of Representatives this week to pass a budget-related bill that will never be enacted, won't work as promised even if it somehow does get signed into law and uses the legislative process for purely political purposes?

"Typical" may be the most common answers. My suggestion? That tried-and-true federal budget phrase so often used to complain about federal spending: "Waste, fraud and abuse."

The legislation is the Full Faith and Credit Act, a bill that supposedly would make payments to federal bond holders the priority if the federal debt ceiling isn't raised and the government doesn't have enough cash to pay all its bills when they come due. The legislation would allow the Treasury to borrow more than allowed by the statutory debt ceiling to make these payments.

Given what happened in July 2011 when they decided to do the opposite (you remember the anything-but-super committee, right?), we should all be happy House Republicans have agreed that this time they won't hold hostage the increase in the federal debt ceiling the Treasury says will be needed by the end of February.

We should also be grateful that legislation embodying the House GOP plan will be debated and presumably passed in the House today -- about a month before the deadline.

But it's important to note this moment in federal budget history: The House GOP plan is nothing less than total capitulation to the Obama administration and Senate Democrats.

How much of a surrender? In 2011 Senate Minority Leader Mitch McConnell (R-KY) was saying that a debt ceiling would never again get adopted unless the president agreed to concessions. Eighteen months later the debt ceiling effectively is being raised with no White House concessions and the GOP is struggling to come up with some kind of spin it can use to counteract what everyone can see...that it tucked its tail between its fiscal legs and rolled over.

Over at The Plum Line, Greg Sargent has an important post about the way the debt ceiling fight could end without triggering a cash-crunch crisis for the federal government. Greg thinks is could be one of two possibilities.

First, the House GOP could agree to a version of the plan first proposed by Senate Minority Leader Mitch McConnell (R-KY) that helped solve the last debt ceiling fight in August 2011. That plan effectively transfers the ability to raise the government's borrowing to the president. Greg notes that this time the plan would be approved over the legislative equivalent of McConnell's dead body, that is, over a filibuster McConnell himself would lead. Greg also notes, however, that there may well be enough Senate Republicans willing to join the 55 Democrats to make this happen.

Second, Greg says that the same combination of Democrats and some Republicans in the House that voted for the fiscal cliff deal would likely approve the McConnell plan or a clean debt ceiling increase if the GOP leadership allowed the vote to take place.

Politico had an outstanding but truly bone-chilling story yesterday about how appealing the prospects of a default and a government shutdown may be to House Republicans.

According to the piece by Jim VandeHei, Mike Allen and Jake Sherman, forcing a default by not raising the debt ceiling and shutting down the government by not passing a continuing resolution may be the preferred ways to go by a majority of the House GOP caucus no matter what that would mean to the U.S. economy, the Republican Party's overall approval rating, the GOP's prospects for a Senate majority in 2014 or a Republican winning the White House in 2016.

To those of us who have watched Washington operate for a while, this obviously sounds like totally insane, crazy self-destructive behavior by the House GOP.

But it would be wrong to dismiss it out of hand. From the conversations I've had with Republicans House members and staff since the 2012 election, the threats, are real and make a great deal of political sense no matter how obnoxious and damaging it otherwise would be.