Don't play debt ceiling games
The National Debt Clock in Manhattan -- here showing 2009 levels. Credit: AP Photo/Yanina Manolova
The decision by Standard & Poor's, the big debt-rating agency, to declare that the United States will keep its AAA rating with a "negative outlook" is yet another sign, if any were needed, that politicians in Washington must come together on the nation's fiscal problems.
Republicans are using the debt ceiling as leverage in the larger debate over taxes and entitlement programs, but Congress should abandon any thought of brinkmanship on the issue. The ceiling, which will be hit on May 16, has been raised dozens of times since 1962, including seven increases under President George W. Bush.
In a perfect world, perhaps we could do away with the debt ceiling, which is hardly an effective brake on borrowing. But meanwhile, even approaching Treasury's deadline with the matter unresolved could spook global financial markets, which were already unnerved a bit by the S&P announcement.
All over the world, there are signs that creditors are getting nervous. Germany is floating a plan to stretch out Greece's hopelessly unpayable debts. Portugal recently asked for a European Union bailout. And Sunday's election in Finland strengthened the anti-bailout parties.
S&P said the United States has many strengths, but fretted that we have large deficits compared to other top-rated nations and we might lack the political will to agree within the next two years or more on how to address them.
It's unthinkable that America could lose its top debt-rating, or that it could ever default on its debts. The challenge for Washington is to keep it that way. hN
