The last big debt limit increase should carry the nation through until after September of next year – so why are Democrats panicking now? If Republicans take control of one or both chambers of Congress, several have promised to use the inevitable negotiations as leverage to cut back on some of the president’s biggest spending initiatives. So for a party that may well lose its trifecta at the end of the legislative year, time is running out.
Debt Limit – Raise or Raze?
Many Democrats are feeling the pressure to increase the debt limit before they lose the upper hand, as it seems they likely will. Sen. Elizabeth Warren (D-MA) said Tuesday that immediate action should be taken to “deal with” the matter. And it ought to be a bipartisan vote, she added. Sen. Tim Kaine (D-VA) took another approach. He introduced a bill that would delegate the authority of increasing the borrowing limit to the executive branch. Still others suggest doing away with the debt ceiling entirely. Each idea has its merits as well as shortcomings.
Sen. Warren’s plan is essentially the status quo: Let Democrats and Republicans argue about it until they finally hash out a “bipartisan” agreement to avoid defaulting on the nation’s debt. It’s messy, it’s nerve wracking, and so far, it has yet to fall apart completely – though one can’t help but feel the annual standoff is something akin to economic Russian roulette. Can America dodge that bullet forever?
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Mr. Kaine’s plan quite likely would make President Biden the happiest chief executive this century. After two years of failed attempts at power grabs, success here would be a solid win for the administration. Of course, the problem that inspired the gentleman from Virginia is precisely the reason it almost certainly doesn’t have a chance. When Democrats can’t drum up enough Republican support to raise the borrowing cap without a fight year by year, what makes anyone think the GOP could be convinced to hand over that power for good? Another issue with the initiative, of course, is that the president won’t always be a Democrat. What happens when a Republican next occupies the White House? Much like the perennial “nuke the filibuster” outcry, this would strip the majority in Congress of a crucial power regardless of which party holds it.
Then there’s the abolition argument. Don’t raise the debt limit – raze it. Burn it to the ground and never look back. Few if any Republicans would support such a measure, at least not while the reins of power are held by their nemeses across the aisle, and even many Democrats – including Biden himself – have spoken out against the idea. “You mean, just say we don’t have a debt limit?” Biden said when asked about the suggestion. “No. That would be irresponsible.”
Unlimited Credit?
The president would likely be correct in calling such a move irresponsible, if only he and congressional Democrats didn’t already pretend the ceiling doesn’t exist as they craft the annual budget. They’re quick to point out that raising the debt limit merely authorizes the government to pay the bill on the spending already approved. It’s as if they’re saying to the GOP, “If you didn’t want to pay the bill, you shouldn’t have let us – or helped us – spend the money we didn’t have to begin with.” As if Republicans haven’t been fighting against Biden’s budget since day one.
The debt limit was first established in 1917, via the Second Liberty Bond Act. It went on to be increased at least 90 times over the rest of the century and more than a dozen times since. It has never, in over 100 years, been lowered. The national debt it makes room for has grown with each president since Herbert Hoover. And yes, that includes Republicans.
The GOP has often tried, with varying levels of success, to use the inevitable debt ceiling fight to cut back on the spending Democrats say necessitates such increases. But it’s a lose-lose situation for those who would spend less. Should an agreement never be reached to fund the government, it shuts down. Then if the borrowing limit isn’t raised to meet those obligations, the country’s credit rating suffers – and that could cause destabilization around the globe, not just the nation.
And so, agreements are always, eventually, reached. Sometimes cuts are made, but generally the spending and debt simply grow. And with them grows the inevitable catastrophic collapse, even as we push it back another year.
