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It was a relief when Congress agreed to fix the debt ceiling crisis — for now. Last week, the Senate passed a measure to raise the debt ceiling through Dec. 3. The House on Tuesday voted to do the same. That averted the possibility of the U.S. not being able to pay some of its bills when the debt ceiling — about $28 trillion — was expected to be reached in mid-October.
But it clearly isn’t a permanent fix, and Congress is likely to go back debating this issue again in about six weeks.
A permanent solution is needed. Many options have been proposed.
One of the most common is to limit total U.S. government borrowing to a share of the country’s gross domestic product rather than a number that is just bigger than the previous limit. This has been suggested by the Government Accountability Office, the Committee for a Responsible Federal Budget, and others.
Such a metric should be part of a plan to align the nation’s fiscal policy with clear policy goals and objectives. In other words, the costs of legislative proposals — whether to increase spending or to reduce taxes — should be tied to clear justifications for and implications of such budgetary decisions.
Of course, such planning would require agreement on what our country’s goals and objectives are, something that is rare in Washington, whether the debate is about fiscal policy, government programs, Supreme Court nominees or nearly any other subject.
“Raising the debt limit provokes disagreement over what it means to be responsible,” the Committee for a Responsible Federal Budget, a nonpartisan group, wrote last year. “On the positive side, the debt limit reminds policymakers of our unsustainably rising red ink and debt limit increases have often been combined with budget reforms. On the negative side, it enables dangerous brinkmanship that risks default on the federal debt.”
“By the time it must be raised, expenditures in excess of receipts have already been authorized. Further, the debt limit is based on gross nominal debt rather than a more meaningful metric like debt held by the public as a share of the economy,” the group added.
The brinksmanship, which we witnessed in recent weeks and, we fear, we will see again when lawmakers again consider the debt ceiling, likely in late November, is not only politically damaging, it is dangerous.
If the debt ceiling were not raised, Treasury Secretary Janet Yellen said Sunday on ABC’s “This Week,” the consequences would be “a catastrophe and would likely lead to a recession.
“We should be debating the government’s fiscal policy when we decide on those expenditures and taxes, not when the credit card bill comes due,” Yellen said.
BDN columnist Gordon Weil offered a simple solution that builds off this idea of having lawmakers debate spending levels and their impact on the debt when individual bills are being debated, not as a separate measure aimed only at raising or suspending the debt ceiling — and blaming the other party for it.
“In the future, each spending bill should include the sentence: ‘The debt ceiling is hereby adjusted to the extent required by this appropriation of funds.’ That would end the dangerous political games,” he wrote in his most recent column.
We’re not naive enough to think this is a change that we will soon see. But, having an honest discussion about the cost of bills — both to raise money and to cut taxes — is a better way to fully account for the national debt than arguing over the next increase in the debt ceiling.