The federal government must contend with the following problems: deficits of about $500 billion per year; a debt ceiling limit that will be reached in December; and no actual budget – just a continuing resolution.  The Democrats want to solve these problems by raising taxes on the rich, as if to exterminate them.  They also want no budget cuts.

This will not help the economy, so what should the Republicans propose?  I suggest that the Republicans use the only weapon that they have.  If they do nothing about the debt ceiling, then the government will be forced to balance the budget.  Democrats will erroneously claim that they will have to shut down the government.  In actuality, they need only limit government spending to what comes in.  This would mean spending 85% as much as the continuing resolution allows.  The Democrats would threaten to cut from the 15% that the Americans need the most, such as Medicare payments, Social Security payments, and interest on the debt.

The solution is to put in place a law specifying the order in which money will be spent.  This order should be the interest on the debt; entitlement payments to people who contributed, such as Medicare; entitlement payments to people who did not contribute, such as welfare; then defense spending; and finally domestic spending.

The Democrats will be smart enough to know that their leverage will be taken away, so we should provide the spending order incrementally and inside an important bill.  In December, the debt ceiling increase should include language to prioritize paying interest on the debt.  Since the Democrats want the debt ceiling bill to last only three months (to maximize the number of times they can complain about the "squandering" Republicans), we should accommodate them.  In March, we will have another debt ceiling bill that makes entitlement payments the second priority.  Eventually, we will have prioritized all of the government spending.  Then the fun starts.

The Republicans will propose substantial cuts to domestic spending.  The Democrats will refuse.  The Republicans will threaten to keep the debt ceiling as is and just not pay for any domestic spending that we cannot afford.  The Democrats, realizing that half a loaf is better than none, will settle for the proposed domestic spending cuts.  Energy Secretary Rick Perry will realize his dream of getting rid of Cabinet departments whose names he cannot remember.

Domestic spending exceeds the deficit.  With judicious cuts, we can balance the budget, and the debt ceiling will never need to be raised again.