National Commentary

Moran’s News Commentary: Eliminate the Debt Ceiling

This week, the House of Representatives will vote on a “Resolution of Disapproval” condemning Congress’s decision to increase the debt ceiling. If that sounds confusing it’s because it is. In the final debt ceiling deal negotiated by congressional Republicans, they demanded that Congress be able to vote to “disapprove” of the decision to raise the debt ceiling after the ceiling limit was increased. Pure political theater and a waste of Congress’ time.

To prevent future politicians, regardless of political party, from holding our nation’s economic security hostage over the debt ceiling, I joined Representatives Jerrold Nadler and Hank Johnson to introduce the “Full Faith and Credit Act of 2011,” legislation that would eliminate the debt ceiling and therefore the threat of a politically motivated and unnecessary U.S. credit default.
To demonstrate the importance of this legislation, it is useful to look at the origins of the debt ceiling itself. Established in 1917, before Medicare, Social Security, and long before our nation invested over $1.2 trillion in military involvements in Iraq and Afghanistan, the debt ceiling was created to provide the Treasury more flexibility to issue bonds during World War I without abdicating congressional power.

In fact, from 1979-1995, a legislative policy called the “Gephardt Rule” effectively eliminated the debt ceiling by raising the debt limit in concert with any spending bills signed into law. Since the practice was ended under former Speaker of the House Newt Gingrich, far from being constrained, federal deficits have increased dramatically.

The debt limit has shifted from a minor, if redundant, procedure to a potential devastating political tactic. This August, Republicans, egged on by Tea Party activists, pushed our economy to the brink in order to force drastic and ill-timed cuts to the federal budget. Following the debt ceiling deal, Standard & Poors, reflecting the uncertainty which Republican brinksmanship had introduced into the credit markets, downgraded the U.S. credit rating for the first time in history. Moody’s, one of the other two major ratings agencies, responded to the crisis by calling for the repeal of the debt limit.

Republican proponents of debt limit gamesmanship claim that the debt ceiling is necessary to contain spending by the Federal Government. This argument is incorrect. Congress determines whether we run a deficit by voting on levels of spending and revenue. By the time Congress considers whether or not to increase the debt limit the money has already been spent. The question at hand is not whether we will spend more money in the future, but whether we will pay our bills.

Even Norman J. Ornstein from the conservative American Enterprise Institute pointed out that “the House voted for a budget that itself increases the debt by trillions over the next 10 years and is now refusing to increase the debt ceiling to accommodate its own budget.”

Republicans in Congress have shown they are willing to hold our economy hostage by using the debt ceiling as a political weapon. It’s a tactic that has far ranging effects, disrupting financial markets, damaging the peoples’ trust in government and delaying consideration of must-pass legislation to create jobs and get our economy back on track. A U.S. government default would be disastrous and simply must not be an option. Given the ramifications of congressional Republicans’ irresponsible behavior, the debt ceiling should be eliminated. It does not serve a useful purpose yet has the potential to do great harm.

 

 


 

Rep. James Moran (D) is Virginia’s 8th Congressional District Representative in the U.S. House of Representatives.


 

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