The ongoing “fiscal cliff” fireworks in Washington have made for a riveting wonk drama — sequestration! marginal tax rates! chained CPI! — and they may yet result in a sensible deal to avoid an economic cataclysm next year. But part of any eventual settlement should include reforms to ensure this kind of manufactured crisis never again threatens the nation’s economic well-being.
The current negotiations were sparked by last year’s fight over the debt limit — a statutory cap, instituted during World War I, on how much the government can borrow. Breaking with decades of precedent, House Republicans refused to raise the limit last year. They claimed to be taking a stand against government spending, but their focus on the debt limit confused the issue of spending with that of borrowing. Essentially, the House GOP took the creditworthiness of the United States — its ability to pay for spending lawfully approved by Congress itself — as a hostage in a policy fight over future budgets.