Just cut spending. No, raise taxes on the rich, too. What if we reform the whole tax code? Fine, but don’t spook the financial markets, and don’t make us perform this dance again next year.
So many options, so little agreement.
Welcome to July 2011, when ordinary Americans are following the shots and fouls of the federal debt as if this were Sweet 16 college basketball brackets.
The debt is a problem, but failure to raise the amount the government can legally borrow could be worse, many say. What can be done about it?
President Barack Obama, House Speaker John Boehner and other congressional leaders are trying to hash this out while the government can still pay all its bills. One of their disagreements is how high to raise the $14.3 trillion debt ceiling, and how much spending should be cut to correspond with that hike.
Some Republicans want a debt hike that is a short-term solution for now, matched with spending cuts, while working on more sweeping spending reforms over the next year. The White House hoped for something grander, saying it doesn’t want to just punt the problem into an election year. Others want to pair spending compromises with tax reform, but that would require a short-term solution to get past the looming crisis now and a return to the table later with long-sought tax reform. U.S. Sen. Rob Portman is among those advocates.
Right now, "we simply don’t have time to deal with these bigger issues like tax reform," Portman said to MSNBC’s Andrea Mitchell on July 25, 2011.
"And by the way, if you look back, historically, you know usually the debt limit is for less than a year," he added. "Thirty-four of the last 44 (debt hikes) have been for less than a year. So, this notion that short-term is somehow the exception, it's actually the rule."
Portman, a Republican who was director of the Office of Management and Budget under President George W. Bush, intrigued PolitiFact Ohio with his answer, because he was suggesting that this nation has done an awful lot of punting on the debt ceiling. So we asked his office where he got his information.
Spokeswoman Christine Mangi referred us to a July 24 blog post by Keith Hennessey, who maintains a website called "Your Guide to American Economic Policy." Hennessey is a research fellow at the Hoover Institution, a conservative think tank at Stanford University, and a lecturer at Stanford’s graduate business and law schools. Hennessey also has extensive policy experience as an economic adviser to President George W. Bush and on Capitol Hill.
We turned to Hennessey’s blog and to his backup data. We won’t bore you with details, but we spotted an error in the data presentation as it related to a certain time period. We contacted Hennessey by phone and e-mail and he graciously acknowledged the error and corrected his website. He noted in a return e-mail that it didn’t change his broader point.
He was right. We know because he shared his data with us and told us of the original source, namely, historical tables on the federal debt since 1940. These are maintained by the White House Office of Management and Budget -- Portman’s old outfit -- and we keep sets of these budget documents in our office because you never know when you’ll need them. We took them off the shelf and confirmed Hennessey’s trend line.
That is, of the 44 most recent times that the debt limit has been raised, going back to 1980, Congress and the president have had to come back within a year on 34 occasions and raise it again. Wars, recessions, excessive spending, inadequate revenues, unbalanced budgets -- stuff has happened.
Hennessey picked the number 44 because it represents the last 30 years of debt hikes.
"You could argue things are different now – it’s more difficult for Congress to act, and the spending and deficit problems we face combine with legislative uncertainty around the debt limit deadline to create undesirable financial market pressures," Hennessey wrote in his blog. But he added, "A debt limit extension of three, six, or nine months would be routine based on historic practice."
That’s what Portman said, too -- that 34 of the last 44 have lasted for less than a year.
Portman’s statement was accurate. On the Truth-O-Meter it rates True.
Sen. Rob Portman appearance on MSNBC, CQ Transcripts, July 25, 2011
E-mail and telephone conversations with Christine Mangi, spokeswoman for Portman, 7-26-2011
Keith Hennessey, "Are short-term debt limit increases unusual?," Your Guide to American Economic Policy blog, July 24, 2011
E-mail and telephone conversations with Keith Hennessey, July 26, 2011
"Statutory Limits on Federal Debt: 1940-current," Fiscal Year 2012, Office of Management and Budget
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