US Debt Limit Really Doesn't Limit Debt
CHAPEL HILL, N.C. (AP) — The federal debt limit is a triumph of false advertising.
It doesn't really limit the national debt. Whenever the false ceiling has been reached, it has been raised — forcing unpopular votes in Congress, but not the really hard ones it would take to cut spending, raise revenues and balance budgets.
Ranting about the debt is easier than taming it. So the same political theatrics are played over and over again. The debt limit has been raised 78 times since 1960. The current hassle over No. 79 is more contentious and divisive than the previous rounds because of hardened lines in Congress, not only between Democrats and Republicans but within their rosters, especially on the GOP side where about 80 freshmen sent by tea party voters consider compromise a crime.
The hypocrisy of the whole process was summed up by an expert witness, Barack Obama, now the president championing a debt limit increase, when he tried to explain his own vote as junior senator from Illinois to oppose the raise then-President George W. Bush sought.
He'd said in the Senate in 2006 that raising the debt limit was "a sign of leadership failure." That was in keeping with the congressional pattern: Blame it on the president. No matter that presidents don't appropriate the spending that creates deficits. Congresses do. But it is the presidents who must seek the increased ceilings necessary to avoid defaulting on the debt.
Now that's Obama's job.
"When you're a senator ... this is always a lousy vote," he said in an Associated Press interview April 15. "Nobody likes to be tagged as having increased the debt limit. ... As president, you start realizing ... we can't play around with this stuff."
As for his 2006 vote, which he now calls a mistake:
"That was just an example of a new senator making what is a political vote as opposed to doing what was important for the country."
The sorry fact is that they have become different things.
As Obama said, nobody in Congress likes voting for raising the debt ceiling. That is in part because the act is so widely misunderstood as a vote to increase the debt. It is not. The need for increased ceilings to accommodate past borrowing is not the cause of deficits, it is the effect of deficit spending, voted by Congress and signed by presidents.
Rep. Eric Cantor of Virginia, the No. 2 House Republican leader, put the political distaste of debt limit votes more bluntly. "The debt limit vote sucks," he was said to have told a House GOP conference, while urging approval of a six-month increase tied to spending cuts.
Cantor, House Speaker John Boehner and Sen. Mitch McConnell, the GOP leader, all voted for repeated debt limit increases when Bush was president. The ceiling was raised seven times during the Bush years, twice through parliamentary ploys that got it done without direct votes.
The current dispute is over what would be the fourth increase since Obama became president. On Sunday he announced at the White House that the leadership of both parties in both houses of Congress have agreed on a deal to avoid default.
Historically, the pattern on increases that both sides know are vital has been to make the majority party push the increase and take the political blame. That works when one party can deliver the votes to do it or get enough votes from the other side to pass the increase.
It doesn't work when one party or both balks at the task.
There's political cover for Republicans in the increases that would be tied to massive cuts in federal spending. But that's been done, or tried, before, with no lasting impact. One example: The 1985 law that set caps on spending and imposed automatic cuts if they were exceeded was tied to a debt limit bill. Within a term, it came apart because Congress chafed at the restrictions and simply voted to ignore them.
In the 2011 version of the familiar fight, all the formulas are 10-year plans, envisioning cuts that wouldn't survive the next five election cycles. One Congress cannot force the next one to do anything.
A debt ceiling impasse in 1979, when Democrat Jimmy Carter was president, led the government to essentially default, briefly, on interest payments on about $120 million in Treasury bills. It was only a technicality, the Treasury said, because the payments soon were made.
There were 18 increases in the debt limit when Ronald Reagan was president. The icon of tax-cut Republicans, Reagan argued the case for debt ceiling increases in terms cited by the Obama administration throughout the 2011 dispute.
"The full consequences of a default — or even the serious prospect of default — by the United States are impossible to predict and awesome to contemplate," he said in a 1983 letter urging the Senate to get the limit increased.
Seeking another increase in the fall of 1987, Reagan honed in on the habits of Congress.
"Unfortunately, Congress consistently brings the government to the edge of default before facing its responsibility," Reagan said. "This brinksmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest markets would skyrocket, instability would occur in financial markets, the federal deficit would soar."
In 2011, same issue, same brinksmanship, same threats of default disaster.
EDITOR'S NOTE — Walter R. Mears reported on government and politics for The Associated Press in Washington for more than 40 years. He is retired now and lives in Chapel Hill, N.C.