Opinion | Here’s the debt limit compromise the U.S. needs

Congress’s best course is to approve a short-term debt limit hike. This averts an immediate crisis and gives Republicans and Democrats time to negotiate. The sooner Mr. Biden and Mr. McCarthy endorse this, the better. There are no winners in this fight. A new Post-ABC News poll finds Americans would blame both parties for a default.

Some House Republicans argue that immediately raising the borrowing cap is unnecessary, falsely equating blowing past the debt limit with the sorts of government shutdowns that occur when Congress fails to pass government funding bills on time. They argue that the U.S. Treasury could prioritize payments to creditors to avoid a true national default.

But investors around the world aren’t naive. They will demand higher interest payments if they see any sign the government isn’t honoring all of its commitments. Meanwhile, a range of government services and safety net support would abruptly stop. Among other things, the ensuing economic catastrophe would shred U.S. global primacy, financial and otherwise.

A plausible compromise framework is coming into focus. Rep. Jared Golden (D-Maine) laid out a reasonable plan from which lawmakers can start. Almost everyone can agree on clawing back unspent emergency covid funds, saving about $50 billion in the next two years. From there, a combination of revenue enhancers and spending moderation would be the fairest solution that would not plunge the economy into recession. For example, freezing discretionary spending — or, at least, slowing the growth of spending — for a year or two would not be nearly as draconian as House Republicans’ proposed cuts but would force some pruning after years of sizable hikes. Similarly, ending Mr. Biden’s student debt cancellation plan or increasing the income tax rate on the highest earners to the pre-Trump-administration tax cut level would help significantly.

These measures would not solve the country’s long-term budget problem. For that, Congress would have to touch sacrosanct old-age entitlement programs such as Medicare and Social Security. But even modest shifts would help. The first step is a short-term debt limit increase to enable the talks that are needed to strike a workable deal.