‘We will raise the debt limit. We always have. We will do it again.” — Pres. Barack Obama
President Obama’s words highlight the charade that surrounds the recurring debate over whether it is in America’s best interest to increase the debt ceiling. The president articulates a simple sentiment that pervades his administration: Business in Washington is best when it’s business as usual.
The pattern of pretending to debate the factors contributing to Washington’s debt addiction is a rehearsal of rhetoric that, while increasingly circular, produces one-directional results. As the arguments for and against raising the debt ceiling make their way back and forth between the White House and Congress, continuing this exercise without a balanced-budget amendment in place means that the debt ceiling will perpetually move in only one direction: up.
With the political will for debt reform gaining momentum — propelled by the nation’s declining credit rating, rising oil prices, and high unemployment — it is clear that the status quo can no longer be king. The debt-ceiling charade must come to an end, and the federal government must implement binding, permanent, structural spending reforms — most important, a balanced-budget amendment.
Blindly raising the debt ceiling yet again carries significant risk — indeed, a risk that easily rivals that associated with not raising it. In the last three years, gross federal debt has grown from 64 percent to 93 percent of GDP. Debt of this magnitude crowds out much-needed private investment and could lead to reduced private-sector growth, persistent unemployment, a devastating fiscal crisis (think of Greece), and skyrocketing interest rates. The financial shortfalls created by such conditions could seriously impair Congress’s ability to fund everything from defense to entitlements.
Too often in the current debate, Washington overlooks these daunting threats to our economy that will result from perpetually increasing our national debt. Instead of acknowledging those threats and trying to address them, the establishment uses scare tactics that have proven reliable in the past.
For example, Treasury secretary Tim Geithner, following the lead of past administration officials, presents only the doomsday scenario in which the economic consequences of not raising the debt ceiling would be “catastrophic.” Having abdicated its duty to develop a responsible fiscal policy, the federal government forces the American taxpayer to choose between taking on more debt and facing the “unthinkable.”
As history suggests, the strategy of creating a debt-ceiling boogeyman works every time, and, without a balanced-budget amendment in place to stop it, the cycle continues. Elected officials who have grown dependent on perpetual deficit spending will again quickly reach the limit on each credit card the taxpayers reluctantly give them. Having maxed out one card, they habitually demand another, using threats of fiscal Armageddon to extort taxpayers into giving them “just one more.”
Unfortunately, as the president reminds us, they will do it again — that is, unless we insist that this time be different. This time, the American people should refuse to let Congress raise the debt ceiling without first passing a balanced-budget amendment, one that would compel Congress to hold the line on future spending. And considering that Americans overwhelmingly oppose raising the debt ceiling but overwhelmingly support the idea of balanced-budget amendment, it shouldn’t be too difficult for members of Congress — especially those who agree that refusing to raise the debt ceiling would be “unthinkable” — to commit to passing a balanced-budget amendment before (and as a means of gaining public support for) raising the debt ceiling.
Recently, all 47 Senate Republicans signed on to Senate Joint Resolution 10, a balanced-budget amendment proposal sponsored by Sen. Orrin Hatch and me that would prohibit Congress from spending more than it collects each year unless two-thirds of the members of both houses voted to authorize a limited deficit for a specified purpose. It would likewise prohibit Congress from spending more than 18 percent of annual GDP, raising taxes, or raising the debt ceiling without a supermajority vote in both houses. Similar legislation, introduced just a few days ago by Rep. Joe Walsh of Illinois, is gathering momentum in the House. Under this proposal, a simple majority of Congress couldn’t impulsively raise the debt ceiling to accommodate perpetual spending increases.
As this debate moves forward, I will aggressively oppose efforts to raise the debt ceiling until both the Senate and the House pass the Hatch-Lee Balanced Budget Amendment. I invite my colleagues in both parties and in both houses of Congress to do the same. Those who fail to do so will render prophetic President Obama’s words: “We will raise the debt limit. We always have. We will do it again.”