Fourteen trillion dollars ain’t what it used to be.
Our federal debt blew past that sickening level a couple of weeks ago and, the Obama administration tells us, will eclipse the legal debt limit of $14.3 trillion by spring. The president’s men tell us the limit must go up.
GOP leaders in Congress say any increase must come with a package of spending cuts; some Republicans vow to fight any increase, cuts or no cuts.
Here’s another option I’ve heard no one talk about: Pair any rise with not only spending cuts, but a lower future limit.
Some spending cuts are better than no spending cuts — the latter being one alternative that some Democrats are pushing, even as they talk about dealing with our debt like adults.
But a number of us remain skeptical that a higher limit/spending cuts compromise will only slow, not reverse, our borrowing binge. Putting a debt decrease into the law might help to ease our minds.
The problem with politicians’ (and pundits’) talk about “cutting the deficit” is that it glosses over the fact that a smaller annual budget deficit still adds to the overall federal debt, which is the real worry.
During the late 1990s, a Democratic president and GOP majorities in Congress managed to produce budgets that didn’t add to the debt held by the public. But even then, intragovernmental borrowing — e.g., using money from the Social Security Trust Fund to pay for other spending — meant the total federal debt still increased by hundreds of billions of dollars (see page 9 at link).
What we need is statutory downward pressure on the debt itself. Balanced budgets will necessarily follow.
Lowering the debt limit has been done before, although not in my, or my parents’, lifetime (see Table 7.3 at link). In June 1946, Congress reduced the debt limit to $275 billion from $300 billion. During the ’50s, the ceiling was raised for a time and later brought back down to $275 billion.
Since 1961, the debt limit has only gone up. Some of the subsequent increases were supposed to be temporary, and some did expire — for a few days. Then they were extended and later made permanent.
During the past 15 years, Congress has increased the limit a dozen times, by a sum exceeding $9 trillion. We can divide the blame pretty equally between Republican majorities (six increases, totaling $4 trillion) and Democratic ones (six, totaling $5 trillion).
What matters at this point is that we stop the ascent and begin to pay down some principal. It won’t be long before interest payments on the debt rival entitlement programs as consumers of our tax dollars.
Some news reports have explained that the Treasury can remain solvent until summer, even with the existing debt ceiling. To do that, it could take such actions as slowing payments to contractors or renting out government assets to generate more revenue. That gives Congress more time to make recisions from the current budget, which ends Sept. 30. There’s no shortage of think-tank suggestions for cutting hundreds of billions of dollars of spending.
Could lawmakers later reverse course and repeal the lower ceiling? Sure they could. But given the attention they’ve drawn to our debt, doing so would be political suicide.
The mandate of this Congress, and particularly its Republican members, is to bring spending and debt under control. Some statutory self-restraint is a good place to start.
– By Kyle Wingfield
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