May 31, 2023
The Truth About the Debt Ceiling
By: Art da Rosa, PE, MPA, CFM
Earlier today, I received a message asking me to sign a petition to Congressman Fulcher urging him not to vote for the Debt Ceiling, but instead “to push for a real deal.” I respect Mr. Fulcher, and I also signed the petition. Still, much about the Debt Ceiling is not understood or reported.
To begin with, over the past six decades the topic of the Debt Ceiling was argued and 78 times was the Debt Ceiling raised. The Republicans caved in each time. Why? Here is the truth.
Congress has the Power of the Purse. Over the past six decades, no one political party has had a supermajority. A consensus was required to pass such bills as spending bills and raising the Debt Ceiling. The positions of the Democrats vs. the Republicans are vastly different on this topic.
Frequently, the reported news was that our Nation needed to have the debt ceiling raised to keep the government running AND to not default on our debts. The second point is especially important, but one that I believe is not understood.
Typically, the problem goes beyond keeping the government running. The budget does that: i.e. to fund the military, the parks services, and even the Social Security checks. This remains true even in the odd years when Washington does not pass a budget. In other words, there is sufficient money to keep the government running. What is not budgeted and not reported are the debts. What is that exactly? Today, our national debt is approximately $32 trillion. Interest on this debt is substantial, as in a magnitude in the trillions of dollars. Not having the debt ceiling raised means not being able to make the payment on the interest of the national debt.
Position of the Democrats: They have repeatedly pushed for raising the debt ceiling so that our nation can pay for our debt. While it may sound reasonable, I must point out that their motivation is for them to demand more spending in the following budget cycles. “Hey, we have room in our books, let’s spend it!” This message has been repeated 78 times.
Position of the Republicans: Repeatedly, they have resisted raising the debt ceiling. Repeatedly, they asked for tax cuts, which means lowering the spending. Note again that lowering the spending will create room in the budget to pay for our debts or the interest on our debts. They even had the government temporarily shut down. Temporarily.
78 times. The Democrats know that they have the media on their side, and that the media will not clarify all the issues, thus beating up on the Republicans. Do the Republicans care about perceptions? They do…greatly. Furthermore, with China trying to replace the Dollar with its Yuan, I agree that defaulting on our debt is very bad.
Additionally, paying the debts is simply a moral obligation. Right? Once a loan is taken, we should honor our words and pay the debt. That I agree with. What I disagree with is the continual growth of the yearly budget. Cut it. Reduce it. At the minimum, Freeze it.
The counterargument to the above argument is inflation. The Democrats say something like, “federal employees deserve to have their salary keep up with inflation.” “The federal agencies need to have their allocation adjusted to inflation.” And so the annual budget keeps increasing, and our ability to pay the debt is diminished until the debt ceiling is raised.
Next year, we will have the same discussion in Washington: Raise the Debt Ceiling, or else we have to shut down the government and default on our debts.
The true solution is for the government to lower its spending, and include our debt in the budget.
The Republicans need to be firm in demanding a comprehensive yearly budget. Cut the budget to the level that we, as a nation, can afford. And pay our debt without raising the debt ceiling.
If they don’t, we need to send others to Washington that will.
Art da Rosa is the founder of the book discussion group Patriots for Liberty and Constitution. Beginning in February, he will be leading the group in a discussion of Henry Hazlitt’s classic book, Economics in One Lesson.
