A grand bargain on the debt ceiling may be giddy, misplaced optimism but the possibility is there. Some Republican lawmakers emerging from a meeting with House Speaker John Boehner put the chances at 50-50.
Treasury says the U.S., barring an increase in its borrowing authority by Aug. 2, will lack the money to pay off its obligations and begin defaulting on bond interest, federal salaries, payments to defense contractors, Medicare, basically the whole range of the government's financial responsibilities.
A U.S. default, even a brief one, would be a leap into the economic unknown and no one is sure about the consequences except they will be bad and, at this writing, unnecessary.
Reportedly President Barack Obama and Boehner are within reach of a deal. Obama has just made major concessions in cuts to Social Security, Medicare, Medicaid and other cherished Democratic programs.
He would double the anticipated savings over 12 years from $ 2 trillion to $4 trillion but only if the Republicans agree to raise revenues, a vital half of the equation if the deficit is to be seriously addressed.
This will require considerable political courage on the part of Obama and Boehner. Obama is facing a revolt from Democratic liberals who think he caved too easily on social spending and Boehner faces a noisy and restive GOP faction flatly opposed to any revenue increases, even if they're disguised as loophole closing and ending wasteful subsidies.
If the talks revert to deadlock, Obama is being urged by some Democrats to invoke the 14th amendment, declare the debt ceiling unconstitutional and go ahead and raise it. That post-Civil War amendment says, in part, "The validity of the public debt of the United States, authorized by law … shall not be questioned."
The amendment dealt with Civil War debts but some scholars believe it is applicable to the debt ceiling standoff. Said one, "It was designed to prevent this kind of gamesmanship."
Despite what the absolutists on both sides insist, lawmakers are elected to make judicious compromises and here they are presented with a rare opportunity to make up for a decade of fiscal recklessness.
The battle over the debt ceiling is a serious political crisis, and there is no cause to be served by elevating it into a constitutional crisis.