After a three-and-a-half-month hiatus, the federal debt limit is set to return on May 19, once again renewing the debate about raising the debt ceiling and raising new questions about the mere existence of having a debt limit in the first place. Congress has already shown its immaturity and irresponsibility by allowing budget sequestration to be implemented. In light of this, control over the debt ceiling is too great of a power, a weapon, and a risk, for our government to yield.
In an attempt to avoid a repeat of the 2011 debt-ceiling crisis which led to extremely low congressional approval ratings, volatile markets, and a downgrade of America’s credit rating, congressional Republicans may shift their focus from deficit reduction to tax reform as part of a deal that would raise the debt ceiling.
The White House, on the other hand, remains adamant that it will not have another debt-ceiling debate and wants to shift the burden of raising the debt limit onto Republicans, stating in a Washington Post article, that Republicans "passed on putting our nation at risk of default, and it’s incumbent upon them to do it again.”
The first question I ask is this: Does the concept of having a debt ceiling make sense?
The answer? Yes.
The debt ceiling had the potential to be a cogent roadblock in our political system which would force a dialogue among conservatives, liberals and independents on our spending habits, put our fiscal house in order, and keep us sane and grounded.
Like a medical “time-out” process which forces health care providers to stop and think before a procedure is performed, the debt ceiling was supposed to force our politicians to do the same thing with our money, refusing to continue to kick the can of fiscal irresponsibility down the road.
But is that what’s happened? The 2011 debt-ceiling debacle was disastrous and the adverse effects of it, which are still felt today, happened when Congress was “successful” and did reach a deal. It’s a sad statement on our government’s modus operandi that the federal debt limit has turned into nothing more than a political football, held hostage by both parties to score cheap political points and advance their own agendas.
Our debt shouldn’t be used as leverage by our leaders in a political battle to protect not our fiscal solvency, but their own jobs.
So, should we have the debt ceiling law as currently written? No.
Congress has already proven that self-imposed safeguards against reckless spending don’t work. The sequester, which was intended to be so ludicrous and painful that it would engender a national debate and force Congress to come together in a bipartisan fashion to save the day, has already gone into effect despite Congress’s attempt to avoid it.
This is just further evidence that the debt ceiling, while a rare opportunity for the U.S. government to be proactive and not reactive as well as to take preventative measures to avoid fiscal disaster, is nothing more than a ticking time-bomb at the heart of our political structure.
A survey among our nation’s leading economists conducted by the University of Chicago’s Booth School of Business revealed that 84% of the nation’s economists “agree” or “strongly agree” that “Because all federal spending must be approved by both houses of Congress and the Executive Branch, a separate debt ceiling that has to be increased periodically creates unneeded uncertainty and can potentially lead to worse financial outcomes.”
Angus Deaton of Princeton, who strongly agreed, stated: “It does indeed provide some break on long-term spending, but there has to be a better way.” For the sake of our future, we need to find that better way.
The debt ceiling’s greatest merit is that it has the potential to force a national debate on our government’s spending, deficit, and debt, which now tops $16.7 trillion. But history has proven that the debt ceiling won’t lead to reigning in spending. We desperately need a solution that would impose a national debate about how to deal with spending and control our reckless habits. But the law, as written, is not in our best interests.