It's all Newt's fault

On MSNBC last night, Rachel Maddow had an interesting take on the debt ceiling battle and the U. S. history of default.

In 1997, when Jimmy Carter was president and the Democrats controlled both houses of congress, the Republican minority was holding the government hostage by refusing to raise the debt ceiling as much as the administration wanted.

Just like last night, it all got fixed at the last minute.   But somehow in the frenzy of what happened at the Treasury the next day, some of the bond debts that were due didn't get paid on time.  And the U. S. government actually went into default temporarily.

Ted Cruz and his ilk were claiming that it wouldn't be a big deal.  Actually it was a big deal in 1979, even though it is largely forgotten now.  Because the bond debts were not actually paid on time, the interest rate on their renewal was increased.  And over the ensuing time since then it has cost taxpayers an additioal $12 billion in interest payments.

To prevent that happening again, they changed the House rules.   Instead of having two votes -- one to to authorize a spending budget and one to raise the money to pay for it (i.e. raising the debt ceiling) -- the new Gephardt Rule combined them into one vote.    The House would vote to incur debt and borrow the money to pay for it in the same vote.

That worked fine for 16 years, and there were no more fights about raising the debt ceiling -- until 1995 when House Speaker Newt Gingrich and his band of radicals over-turned the Gephardt Rule.  So we can thank Newt for this government shutdown -- along with Ted Cruz.

Ever since, we've been back to fighting over raising the debt ceiling.   Until Wednesday night, maybe.    The one good thing that may come out of this is that at least the rational members of Congress don't want this to happen again,  Mitch McConnell himself said "We will not do this again."

Actually the Gephardt Rule is very sensible.   The debt ceiling is all about borrowing the money to pay for spending that Congress has approved.  What the Ted Cruz crowd wanted to do was say "we're not going to pay the debts we have honestly incurred."   Why not arrange the financing at the same time you incur the debt?   That's what you do when you buy a house or a car.

Could it be reinstated?   Rep. Louise Slaughter, a member of the House Budget Committee, says it could;  but it would require a change in the House rules, which can be done on the first day of a new session.

Ralph

PS:   I may have to revise my scathing criticism of the good senator from Kentucky.   Still don't like his politics, but he's not the minority leader for no good reason.   He's a smart and crafty politician.   But I'm still rooting for Alison Lundergan Grimes to beat him in 2014.