Permanent setting of the debt ceiling necessary to cope with unsustainable borrowing and team spirit
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It was a relief when Congress agreed to settle the debt ceiling crisis – for now. Last week, the Senate passed a measure to raise the debt ceiling until December 3. The House voted on Tuesday to do the same. This avoided the possibility that the United States would not be able to pay some of its bills when the debt ceiling – around $ 28 trillion – is expected to be reached in mid-October.
But this is clearly not a permanent solution, and Congress is likely to return to debate this issue in about six weeks.
A permanent solution is needed. Many options have been offered.
One of the most common is to limit the total US government borrowing to a share of the country’s gross domestic product rather than a number just above the previous limit. This has been suggested by the Government Accountability Office, the Committee for a Responsible Federal Budget and others.
Such a measure should be part of a plan to align the country’s fiscal policy with clear political goals and objectives. In other words, the costs of legislative proposals – whether to increase spending or reduce taxes – should be linked to clear justifications and the implications of such budget decisions.
Of course, such planning would require agreement on our country’s goals and objectives, which is rare in Washington, whether the debate is on fiscal policy, government programs, Supreme Court candidates, or almost anything else.
“Raising the debt ceiling causes disagreement over what it means to be responsible,” the Committee for a Responsible Federal Budget, a non-partisan group, wrote last year. “On the positive side, the debt limit reminds policymakers of our unsustainable increase in red ink and debt limit increases have often been combined with budget reforms. On the negative side, this allows a dangerous trend on the brink of collapse that risks defaulting on the federal debt. ”
“By the time it is to be lifted, spending in excess of revenue has already been authorized. In addition, the debt limit is based on gross nominal debt rather than on a more meaningful measure such as debt held by the public as a share of the economy, â€the group added.
The scam, which we have witnessed in recent weeks, and we fear will see it again when lawmakers consider the debt ceiling again, likely at the end of November, is not only politically damaging, it is dangerous.
If the debt ceiling were not raised, Treasury Secretary Janet Yellen said on ABC’s “This Week” Sunday, the consequences would be “a disaster and likely lead to a recession.”
“We should be debating the government’s fiscal policy when we decide on these expenses and taxes, not when the credit card bill comes due,†Yellen said.
BDN columnist Gordon Weil has come up with a simple solution that builds on this idea of ​​having lawmakers debating spending levels and their impact on debt when individual bills are debated, and not as a separate measure aimed only at raising or suspending the debt ceiling – and blaming the other party for it.
“Going forward, every spending bill should include the phrase, ‘The debt ceiling is adjusted to the extent required by this allocation of funds.’ This would put an end to dangerous political games, â€he wrote in his last column.
We are not naive enough to think that this is a change that we will see anytime soon. But, having an honest discussion about the cost of the bills – both for raising funds and reducing taxes – is a better way to fully account for the national debt than to discuss the next debt ceiling increase.
