Every couple of years, Republicans and Democrats engage in a tug of war over the debt ceiling. One side declares itself the winner by proving it can reach its hand across the aisle. The other party attempts to appeal to its base by feigning outrage over the fiscal recklessness of the ruling regime. Despite the handwringing and pearl clutching, the elephants and donkeys always reach an inevitable conclusion: America’s borrowing limit is suspended or increased. But one prominent administration official wants to close the doors on the political theater and ensure the government can spend to infinity plus one.
For progressives, this is as heavenly as Beethoven’s Moonlight Sonata. For conservatives, this is as disturbing as The Star Wars Holiday Special – or worse: a President Joe Biden speech.
Bringing Down the Roof
Speaking in front of the House Financial Services Committee on Sept. 30, Treasury Secretary Janet Yellen conceded that she would support abolishing the national debt ceiling. The former head of the Federal Reserve System asserted that the House and Senate move ahead with spending and taxes, so it should automatically possess the ability to cover these obligations.
Yellen told Rep. Sean Casten (D-IL) in response to a question about eliminating this instrument:
“If to finance those spending and tax decisions, it’s necessary to issue additional debt, I believe it’s very disruptive to put the president and myself, the Treasury secretary, in a situation where we might be unable to pay the bills that result from those past decisions.”
Yellen has repeatedly urged Republicans and Democrats to expand the spending limit, purporting that failure to do so “would be catastrophic for the economy and for individual families.”
The Debt Ceiling: A Tragic-Comedy
In May, four Democratic lawmakers introduced legislation to repeal the national debt ceiling, which they describe as “an arbitrary limit set by Congress on the amount of funding that the United States Treasury may borrow.” The quartet contended that this mechanism does not affect government spending and only restricts the Treasury from submitting payments for expenditures that Congress already performed. In other words, it is merely a symbolic gesture for fiscal responsibility, an already absent concept in Washington. Do these legislators have a point? Is the debt ceiling as fake as House Speaker Nancy Pelosi’s (D-CA) false teeth?
Uncle Sam’s fiscal positions have not improved despite the constant multiple back-and-forth confrontations to avoid defaulting since 1995. Instead, the federal government’s debt accumulation has been exacerbated this century, with the national debt topping $28 trillion and the budget exploding to $5 trillion. Moreover, the Congressional Budget Office (CBO) projects that Washington will run a more than $35 trillion tab by the end of the decade.
At this point, the debt ceiling battles only support political gamesmanship. Should the government be on the brink of defaulting, the opposition can go bridge against the White House. Although the Democrats have played this game throughout the years, history has proven that the Republicans fare better in this battle because they champion cuts, no matter how minuscule and inconsequential.
These matches, which are as genuine as something in World Wrestling Entertainment, might also serve another purpose of highlighting politicians’ shock that they need to eventually pay the bills. Bloomberg Businessweek wrote about former Rep. Richard Gephardt (D-MO), who had to find votes to raise the debt ceiling in the late 1970s during his first stint in the House:
“I’d say to members, ‘Did you vote for the appropriations bill? The defense bill? The highway bill?’ They’d all say yes. And I’d say, ‘Well, then you gotta pay the bill. If you didn’t mean it, don’t vote for it. Then you won’t have to pay for it.’”
Will That Be Cash or Credit?
If this is how public policy is made, are the adults indeed in charge? It is comparable to consumers who rack up the credit card and then complain about how Visa and MasterCard are fleecing their pockets. But rather than make the tough decisions, the Swamp’s permanent fixtures have mastered the art of kicking the can down the road. However, they can sustain the mirage of prosperity because the metal can is so damaged that it is hardly recognizable anymore. This is the state of the public purse: Nobody can fathom how it has metastasized after all these years.
~ Read more from Andrew Moran.