A battle is raging in Washington, D.C. over raising the debt ceiling, which the U.S. hit May 16.
One side says that reaching the ceiling is a failure in leadership and demands massive spending cuts with no tax increases to help balance the budget. The other side says that refusing to raise the ceiling would be catastrophic, as it would cause the nation to default on its debts.
While there is room for debate over the proper course of action, both sides have already committed to raising the debt ceiling past the current level of $14.2 trillion. In essence, the debt ceiling is no real barrier to increased government debt, and only currently serves as another point of contention amongst political parties. As such, it should be reconsidered.
A Congressional Research Service (CRS) report from June 1 titled “The Debt Limit: History and Recent Increases” gives two validations for the existence of a debt ceiling. It asserts that the limit provides Congress with the power to execute its constitutional responsibilities of spending control. Yet, because all spending bills must originate in the House of Representatives, that reasoning is redundant.
The CRS’ second assertion is that the limit imposes fiscal responsibility on the president and Congress. It quotes Marshall Robinson as saying the debt limit “expresses a national devotion to the idea of thrift and to economical management of the fiscal affairs of the government.” Robinson says this in his work “The National Debt Ceiling: An Experiment in Fiscal Policy.”
That experiment is proving to be a failure. According to the CRS report, Congress has raised the debt ceiling 10 times since 2001, when former-President George W. Bush took office. Over that time, the ceiling has more than doubled, increasing from $5.9 trillion in 2001 to $14.3 trillion in 2010. The idea that the debt ceiling is holding Congress and the president responsible for debt is laughable at best.
What the CRS report does say is that the limit can hurt the Treasury when managing the national debt. It says it has, at times, caused the Treasury “great inconvenience and has added uncertainty to Treasury operations.”
The debt ceiling’s dark side is that it complicates government operations and is now being used as a political weapon. It serves no constructive governmental purpose and should be eliminated.