The debt ceiling “crisis” infuriates me.
Because, from top to bottom, it is a manufactured, therefore, wholly avoidable crisis, which put the U.S. economy on the brink of default, possibly tanking it and risking this country the reputation of a bad check writer. We all know what happens to the credit ratings of bad check writers.
It infuriates me, also, given the attempts to spin this as “holding spending in line.” Curiously, this is spending that the Congress itself authorized, and now balks at when payment is due. That is a special form of hypocrisy, considering that it is Congress, not a president, who holds the purse strings.
Don’t let ‘em tell you this is business as usual.
Not only has it not been “just the way it is” since the founding of the United States, it hasn’t even been the norm for most of the history of the debt ceiling itself.
According to the US Treasury, the debt ceiling dates to 1917, when Congress, in the midst of World War I, created it by passing the Second Liberty Bond Act.
Up to that year, the norm was for Congress to pass legislative acts that approved the issue and the amount of each bond put out by the U.S. Treasury. Congress either authorized specific loans or let the Treasury issue certain debt instruments and individual debt issues for specific purposes. Sometimes Congress gave the Treasury discretion over what type of debt instrument would be issued.
The Second Liberty Bond Act allowed the Treasury to issue bonds and take on other debt without specific Congressional approval, as long as the total debt fell under the statutory debt ceiling.
According to the US Treasury, the debt ceiling does not authorize new spending commitments, it just allows the government to finance existing legal obligations that Congresses and presidents of both parties have made in the past.
According to the Treasury, failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations – which has never happened in American history. That would precipitate another financial crisis and threaten the jobs and savings of everyday Americans – putting the United States right back in a deep economic hole, just as the country is recovering from the pandemic.
Congress has always acted when called upon to raise the debt limit. Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit – 49 times under Republican presidents and 29 times under Democratic presidents. Congressional leaders in both parties have recognized that this is necessary, according to the US Treasury.
Yes, history tells us, lawmakers on both sides of the aisle grumbled. Yet until 1995, no party used the debt ceiling as a cudgel to extract concessions under threat of blowing up the economy.
I have never been able to stomach this misuse of the debt ceiling, which directly translates to,“Either give in to our demands, or we shoot the fair maiden here.” I hate to use the word extortion, but I don’t know what else to call this.
It’s truly scary that there are fire-eaters now in Congress who would fire that shot. Not so much out of some deep desire to cut spending, I believe, but merely to score political points by hanging a disaster around the neck of a president from the opposing party before an election. They hope to hoodwink the American people. I hope we’re not as stupid as all that.
President Biden should not have agreed to negotiate. But he did, and in so doing set up the likelihood that this manufactured crisis will now play out every year, only, however, if history holds, whenever a Democratic president is in the White House.
This is a disgusting tactic, and Congress should act to kill it as soon as possible.
Robert Whale can be reached at rwhale@soundpublishing.com.
