Don’t use the debt ceiling to set fiscal policy
Suffice to say, it isn’t often that President Barack Obama and former House Speaker Newt Gingrich actually agree on something – at least publicly.
So we took particular notice Tuesday when Gingrich chastised his Republican colleagues for threatening to take the nation to the brink of default – just as they did in 2011 – over the raising of the nation’s debt ceiling next month.
“No one is going to default,” he said on “CBS This Morning.” “No one is going to allow the United States to not pay its bills. No one is going to accept the economic costs. It rallies the entire business community to the president’s side.”
We hope they listen. Because the president is absolutely correct that the debt ceiling shouldn’t be used as a blunt instrument to set fiscal policy under the threat of a government default of its financial obligations.
After all, wasn’t it the debt-limit fight of 2011 that ultimately led to a sequestration process so onerous that Congress pushed the deadline into February as part of the “fiscal cliff” agreement?
This doesn’t mean, of course, that the White House and Congress shouldn’t be engaged in serious discussions about reducing the federal government’s trillion-dollar annual budget deficits and $16.4 trillion national debt. They should.
It just means that those talks about future spending should occur separate from raising the nation’s debt ceiling to pay down debt of previous spending already authorized by Congress.
That also happens to be the position of the respected Concord Coalition, the nonpartisan fiscal watchdog group founded in 1992 by former Sens. Paul Tsongas, D-Mass., and Warren Rudman, R-N.H., along with former U.S. Commerce Secretary Peter Peterson.
On Monday, the Virginia-based group urged Congress to raise the debt ceiling immediately and then work with the White House to develop a comprehensive strategy to put the nation’s finances on a more sustainable course, noting the debt limit has “never proven to be an effective means of controlling debt.”
Just as importantly, in order to avoid these manufactured crises in the future, the organization suggested Congress instead consider inserting debt-limit language into any piece of legislation that would necessitate borrowing money beyond the limit at that time. That would move the discussion of borrowing money to where it should be – prior to approval, not afterward.
And that certainly would be more politically palatable than Democratic legislation to be introduced Wednesday that would repeal the debt ceiling altogether. A similar bill failed to gain traction in 2011 and no doubt will be dead on arrival in the Republican-controlled House this year.
Now, it’s true that the party out of power historically has voted against raising the debt limit to make a political point – including then-Sen. Obama in 2006 – and vice versa.
For example, when George W. Bush was president and Republicans controlled the House, resolutions boosting the debt limit passed with between 193 and 214 Republican votes. When Democrats controlled the House during Obama’s first two years in office, similar resolutions failed to secure a single Republican vote.
Add that to the many reasons why the debt ceiling should be summarily rejected by both parties as a legitimate tool to control the nation’s debt.