The debt ceiling is a statutory limit on spending created by Congress. It’s not in the Constitution.
There almost always has been a national debt, with upward spikes at times of crisis such as the Civil War and World War I. Sustained and ominous growth of the debt occurred during the New Deal in 1930s. In 1939, Congress created the debt ceiling that is in the news today.
Because the debt ceiling was created by legislative action, it can be changed by legislative action. Congress has raised the debt ceiling more than 70 times. By routinely raising the debt ceiling, Congress has rendered it virtually meaningless – except that periodic debates about whether to raise the debt ceiling send nervous tremors through financial markets because of feverish speculation that America will default on its debt-financing obligation.
After the latest raising of the debt ceiling, a supersize headline on the front page of my local newspaper blared: BACKING AWAY FROM THE BRINK.
What "brink"? There need not be any threat of default. The Constitution requires America to service its debt, meaning we make the periodic debt payment on what we have borrowed to finance deficit spending, similar to a mortgage payment. There is no default on American credit if we follow the Constitution and pay that obligation first, which is about $30 billion per month.
Then there is the problem of insufficient remaining money in the treasury to pay for the other spending that has been approved. The federal government should cut spending to match revenue or raise revenue to match spending. It should not keep taking the coward’s way out and borrow more money to cover the difference.
In doing research for this post, I came across an Oct. 17, 2013, news item at www.nbcbayarea.com that ridiculed U.S. Senator Rand Paul (R-KY) for making the same argument: There’s enough revenue to cover the debt-financing obligation; pay it and then prioritize remaining spending. The story relied on a professor at Berkeley Law School who served in the U.S. Treasury’s Office of Tax Policy from 2010-12. The professor and former Obama administration bureaucrat is a classic example of what we’re up against in trying to save the country. He said government computers are programmed to pay bills in the order they are received; they aren’t set up for prioritized spending. He said there was “absolutely no authority” for prioritizing spending and it would be “illegal” to do so.
It’s the typical leftist mentality. Gosh, the computers aren’t wired for that, so that’s the end of the conversation. This giant machine has been set in motion and no one can do anything about it. We must serve it and obey it and dare not change it or the sky will fall on us.
Some leftists laugh at people who believe in God and practice religion, yet they become completely servile to the god of big government.
Hey, professor: If the computers aren’t programmed to make the debt-financing payment first, then that system is unconstitutional. There is authority for prioritization. It’s called the Constitution. It mandates that America service its debt. The Treasury Department’s computer system is not exempt.
As for the rest of the budget, Congress and the president absolutely are authorized to get back into the budget and prioritize. In fact, it might be a healthy exercise to go through each line item and say pay this first, pay this second, pay this third, and so on.
No more whining from House Republicans about being unable to do anything because the House is only one-half of one-third of the federal government. The president is not supposed to be the dominant force in fiscal policy. The Supreme Court is supposed to apply the rule of law, not make policy. The Senate originally was an appointed body whose members were beholden to their state legislatures. Popular election of senators has created another division of the Washington ruling class with its center of gravity in D.C. Still, the House is supposed to be a power-House on fiscal issues. The House was given the power of the purse because it’s the part of the federal government closest to the people, with members facing election every other year. The House is supposed to drive policy on taxing and spending. Part of the reason for other branches seizing policy-making power has been the passivity of the House.
I disagree with those who say raise the debt ceiling with no strings attached, then reform the budget. It will never happen. The same “we’ll fix it before the next crisis” refrain surfaces every time the debt ceiling is breached. Those who utter that refrain never have delivered on that promise. Why would anyone expect that to change?
The next round of the debt ceiling drama is in February. The House should declare right now (November 2013): No raising the debt ceiling and borrowing more money unless a balanced budget amendment has been added to the Constitution. Congress immediately should crank out to the states a balanced budget amendment with an effective date 10 years out, and state legislatures should approve it ASAP. Otherwise the debt ceiling should not be raised in February and the federal government should buckle down to the brutal task of paring the budget to make spending match revenue. The president and members of Congress will have to earn those six-figure salaries by making tough fiscal decisions. Either we start chopping spending now to match available revenue, or we do it in a more measured manner over 10 years under the pressure of a constitutional provision requiring a balanced budget. Fiscal reformers can no longer do business-as-usual and raise the debt ceiling without getting anything meaningful in return.
If the House doesn’t have a majority willing to do that, then voters need to press candidates on this issue and send to Congress those who will form the needed majority.
I can’t resist sharing this again:
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