Three weeks ago, our country’s leaders came within an hour of shutting down the federal government, fighting over relatively small cuts in this year’s budget. Now comes the far harder task of securing votes to raise the federal debt limit by early July — before the nation’s borrowing ability expires.
The stakes are now vastly higher. Failure to pass it could damage the economy and hurt every American. But there should be a way out of this that meets the core requirements of both parties and, at the same time, reduces our future debt.
Avoiding a calamity will require something different and far more ambitious than what got us through the budget skirmish. This is because the debt limit cannot be trifled with like a budget resolution. When we approach the limit — which is $14.3 trillion today — it is either raised, and we continue to borrow, or it isn’t, and the United States defaults, just like the Lehman Brothers or Enron.
Roger C. Altman is founder and chairman of Evercore Partners, served as deputy treasury secretary. Richard N. Haass is president of the Council on Foreign Relations and served as director of policy planning at the State Department.