Progressives and most Democrats want the $31.4 trillion federal debt ceiling raised without any Republican preconditions. Better yet, in their view, it should be completely eliminated.
But eliminating or temporarily suspending the federal debt ceiling is a bad idea. That’s because the occasional debt-ceiling clash is the only time Washington and the public are confronted with how much money the federal government spends.
It is true, as Washington’s big spenders point out, that the federal debt limit has been raised or modified many times. The U.S. Department of the Treasury informs us, “Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit—49 times under Republican presidents and 29 times under Democratic presidents.”
In the past decade, the debt ceiling wasn’t just raised, but temporarily suspended—once under President Obama and three times under President Trump, in the last case for a little more than a year.
The problem is that when there is no federal debt limit staring Congress in the face, there is no serious discussion of the need to cut or control federal spending.
Without a federal debt limit, Democrats—bolstered by the voodoo economics of Modern Monetary Theory, which essentially says there are little to no economic constraints on government spending—gleefully continue their spending spree, sometimes aided by Republicans.
There was virtually no Democratic discussion of the impact on the federal debt during the passage of their American Rescue Plan ($1.9 trillion), the infrastructure bill ($1.2 trillion) and the Inflation Reduction Act ($430 billion)—not to mention legislation that funds basic government, such as the $1.7 trillion omnibus that passed in December. Both the omnibus and the infrastructure bill had some Republican support.
All that spending accelerated the government reaching its borrowing limit. And now that it has reached that $31.4 trillion limit, there is once again public discussion about government spending. And Democrats, President Biden, and the media all want to “cancel” that discussion by:
- Asserting there will be no negotiations over spending because it’s Congress’s (that is, Republicans) job to pay for Democrats’ spending; and
- By frightening the public with constant stories of economic calamity if Republicans don’t concede.
Republicans and Democrats will likely come to some agreement, though it may be weeks, if not months off. They always have.
But the one thing Republicans shouldn’t agree to is a suspension or elimination of the debt limit. It’s the only tool conservatives have to occasionally remind the country that Washington is spending trillions of dollars it doesn’t have.