finally reaching a a settlement In raising the federal debt limit this week, ensuring the United States can pay its bills for the next few months, members of the US Senate have performed a public service almost akin to a potential arsonist who Puts the matchstick in his pocket and walks away with the straw.
In 2019, the last time Congress played with fire, before finally raising the ceiling, this board wrote That “anything less than eliminating the limit is legislative misconduct at public expense.” The utterly unnecessary brashness over these past few weeks has only served to reinforce that decision.
Policy making in the United States has been reduced to tackling any crisis. On questions of public spending, as in other areas such as public health, country leaders have lost the ability to make the kinds of decisions necessary to avert future crises. The deal that happened this week doesn’t solve anything.
The ceiling, created in 1917 to streamline federal borrowing, has not served a useful purpose in living memory. It is only permanent as a dangerous obstacle to the essential function of the federal government. Those who defend the debt limit as a check on federal spending misunderstand its mechanics.
The ceiling is a federal borrowing limit, just like a credit card limit. The government borrows only for expenses authorized by Congress, or to pay interest on outstanding debt.
Congress has already voted to spend this money. The only options at this point are raising the loan limit so that the necessary funds can be borrowed, or breaking promises.
Failing to raise the debt ceiling would undermine the foundations of the global financial system, which rests on investors’ absolute confidence that the United States will always repay its debt.
Will Democrats face a midterm wipeout?
Even a glimmer of risk is enough to trouble the market. Another recent debt limit impasse, in 2011, cost American taxpayers nearly $1.3 billion As investors demanded higher rates on federal loans. which in turn went up other interest ratesThis includes home and auto loans.
Treasury Secretary Janet Yellen said last month that it “very destructiveFor Congress to authorize the spending and then to debate separately whether to pay bills that have already been done. Congress can pass a common-sense law, and it must replace the ceiling with a law that says the government can borrow whatever is necessary for Congress-authorized spending.
Instead, the two political parties continue to misbehave in different ways.
Senate Republicans are simply engaging in economic sabotage. Under Democratic presidents, they routinely hinder the process of raising debt limits for no apparent purpose other than fear.
They also misrepresent the nature of the roof, perhaps because it would otherwise be unable to defend their behavior.
Senator John Cornyn on Wednesday denied the exact details of the proposed increase needed to pay for spending commitments already made by the federal government. “No,” Mr Cornyn wrote on Twitter. “Otherwise we would have already crossed the debt limit. It’s for future spending.” That’s all, Mr Cornyn: future spending on commitments already made by the government.
In contrast, Democrats are guilty of cowardice. They are ready to raise the ceiling, but most are unwilling to get rid of it. The White House has categorically refused to endorse Ms Yellen’s views. Some Senate Democrats have taken a public stance, but not enough to avoid a repeat of this tragic circus as the United States approaches the new debt limit in the coming months.
One rationale expressed quietly by Democrats is the fear that if they voted to end the debt limit, Republicans would paint them as financially irresponsible. Yet to avoid that risk, they are being made financially irresponsible.
In recent decades, the government has increased borrowing to cover the growing gap between tax revenue and spending. The national debt is now above $22 trillion, equivalent to about 98 percent of the country’s annual economic output, although interest costs remain low.
The size of the federal debt is a legitimate topic for public debate.
But debt limits are not a useful mechanism to prevent the federal government from living beyond its means, as it does not prevent Congress from meeting new obligations.
It is not a meaningful measure of a country’s financial health. It is set in dollar terms, and should be increased even if the federal debt is not increasing as part of the country’s economic output.
Debt ceiling votes for the losing side in the battle about federal spending should not be considered an appeals process, as in 2011, when congressional Republicans refused to raise the debt limit until the Obama administration. did not accept caps on spending growth.
Democrats Can End Ceiling Without Republican Support by getting rid of filibuster, or by limiting its use. The resistance of some Democrats, notably Senator Joe Manchin of West Virginia, is to prevent the end of one harmful institution to preserve a more harmful institution.
Senate Democrats can also prevent a filibuster by using the current process known as conciliation to raise the debt limit to a height that would render it purely decorative. Denmark, the only other democracy with a comparable limit, has chosen this route, its limit far above its actual debts.
The great thing about this week’s deal is that it gives Democrats a few months to come to their senses. Senators themselves can decide whether serial brinkmanship is good politics. What should be completely clear is that this is bad for the country.