What is the federal debt ceiling? In short, it’s “a number over which the nation’s debt is not allowed to reach” (Conrad 2016). What’s troubling, however, is that the need to raise the debt ceiling implies that the debt has already accumulated, in which case if the ceiling is not raised then America will be forced to default (Conrad). This is more explicit in Morgan’s definition of the debt ceiling: “The debt ceiling is a legal cap on how much money the federal government can borrow to fund its budget deficits and meet debt obligations” (Morgan 2017, emphasis added). In other words, how much more debt can the federal government get into in order to pay for its debt obligations? If this sounds screwy, it’s because it is.
“If Congress ever failed to raise the debt limit, it would destroy America’s reputation as a country that always pays its bills. And we’d all pay the price.” So say Ryan Clancy and Margaret White (2019), of No Labels, a national organization that seeks to arrive at non-partisan solutions to our nation’s most divided policy issues, in their recent book, The Ultimate Guide to the 2020 Election. President Obama used this same line during the debt ceiling debate in 2013, even though as a senator he opposed increasing the debt ceiling back in 2006 (Mikkelson 2013; Schiff 2014). How one thinks raising the federal debt ceiling, which legally allows the federal government to get into more debt, equates to America paying its bills is beyond me. Yes, technically, this allows the government to avoid default; but they’re essentially doing so by borrowing more money to pay for existing debt obligations. This is merely shifting bills around. Schiff has remarked that Congress needs to raise the ceiling precisely because it “neither does nor can pay its bills” (Schiff 2014). And, of course, we’re all still going to pay the price; it’s just been postponed, but for how long?
Schiff remarks, “The problem is that the initial debt ceiling of $11.5 billion [back in 1917] has been raised every time it has been approached. A movable ceiling is tantamount to no ceiling at all.” The necessity to move the ceiling to avoid defaulting on debt creates a unique environment for leveraging one’s vote. “Therefore, threatening to withhold your vote is a pretty powerful bargaining chip” (Conrad). Republicans have used the debt ceiling debate to attempt to “defund implementation of the Affordable Care Act” (Zigmond 2013) as well as cut spending, reform entitlements, and implement spending caps to balance the budget (Sparshott 2011). Democrats, on the other hand, have used it to attempt increased spending on or reforms to immigration and healthcare (Pollack 2017), for example.
In light of the political leverage that the debt ceiling provides, it’s difficult to imagine a subsiding of this national ordeal. While both parties should agree to work on balancing our nation’s budget, which would entail drastically cutting spending and possibly increasing taxes (at least for a time, or coming up with an alternative approach to taxation), it’s difficult to envision both parties agreeing on such a solution. After all, it’s a perfect opportunity for each party to attempt to push their pet policies or prevent the implementation of their opponents’ policies. A party’s success will of course depend in large part on who controls the government at the time, both in the presidency and Congress.
Conrad, Jessamyn (2016). What You Should Know About Politics…But Don’t, 3rd ed. (NY: Arcade Publishing). 64.
Morgan, David (2017). “Democrats see edge in debt ceiling debate; Could open door to bipartisan U.S. tax reform” National Post.
Clancy, Ryan and Margaret White (2019). The Ultimate Guide to the 2020 Election: 101 Nonpartisan Solutions to All the Issues That Matter (NY: Diversion Books). 152.
Schiff, Peter (2014). The Real Crash: America’s Coming Bankruptcy—How To Save Yourself and Your Country (NY: St. Martin’s Press). xiii-xiv, 32.
Mikkelson, David (2013). “Obama on the Debt Limit” Snopes. https://www.snopes.com/fact-check/ceiling-whacks/. Last accessed on March 13, 2020.
Zigmond, J. (2013). “New budget battle erupts” Modern Healthcare, 43(37), 4.
Sparshott, Jeffrey (2011). “US Chamber Economist: Republican Logic In Debt Ceiling Debate Flawed” (Dow Jones Institutional News. Pollack Ron (2017). “Under Trump, Democrats have been shut out of policymaking. That’s about to change.” Vox. https://www.vox.com/the-big-idea/2017/11/30/16719410/debt-ceiling-debate-democrats-republicans-daca-aca-schumer. Last accessed on March 13, 2020.