ChrisWeigant.com

Abolish The Debt Ceiling

[ Posted Thursday, September 23rd, 2021 – 15:23 UTC ]

Here we are again. The Washington Kabuki theater is raging while all the media cheerfully go along for the ride. Will the United States reach its debt ceiling without Congress acting, and will the country then default on its debts for the first time in over 200 years? What will that do to the world's economy? What will it do to the American economy? Red flags are waved, warning beacons go off, fire alarms sound, signal flares are launched. It's all merry fun until a way is figured out (at the last minute!) to save us all from the "fiscal cliff" of defaulting on our obligations. It's all as regular as clockwork, now. But it just doesn't have to be this way.

Democrats are already being forced to pass a hike in the debt ceiling completely on their own. Senate Minority Leader Mitch McConnell is being a total schmuck about the whole thing, insisting that Republicans want absolutely no part in saving America from financial disaster. Democrats are in control, therefore Republicans are free to vote for the destruction of our entire country's economy. For McConnell, this is really just run-of-the-mill schmuckery, though. It really just feeds into his schmucky brand, to be honest. So he's comfortable enough with it all.

But if Democrats are going to be left to their own devices, why not defuse the issue forever? Instead of passing an increase in the budget ceiling, instead just abolish the concept once and for all. Never again will Republicans get to hold the entire country's economy hostage. Which any sane person would have to admit they will indeed do, if they are not pre-emptively stopped by eliminating the possibility entirely.

Right now, McConnell has no real leverage. He cannot issue demands, because he is in the minority in the Senate. But if he regains the majority in the midterm elections, then he will indulge in such hostage-taking the next time the debt limit is reached. It is a virtual certainty. If for some reason this doesn't happen in 2022 or McConnell steps down at some point, it's still a virtual certainty that whatever Republican is leading the Senate whenever they take back control, they will always now take this hostage when there is a Democrat in the White House.

When Republicans are in the White House, Republicans have no problem whatsoever voting to raise the debt ceiling, it's worth pointing out.

One way or another, though, this situation is going to happen in the future. So why let it?

What's usually lost in this debate is that there actually was a recent period when the debt ceiling essentially did not exist. Historically, there was no debt ceiling in our first century, it didn't appear until World War I. Up until to that point, each individual Treasury bond or other issue had to be specifically approved by Congress. This wasted a lot of time, however, so they just consolidated this during wartime to a single number -- the Treasury was authorized to issue this much debt, but no more. Then the Treasury was free to do so using whatever methods it wished. This streamlined the process that had been in place.

For a long time after that, raising the debt ceiling was routine, and just a footnote in Congress. Then in 1979, one freshman congressman (who had been detailed to push another debt ceiling raise through the House, as scutwork for a new guy) questioned the entire premise. Here's what he did about it when he realized the potential for an actual default was built into the process:

In 1979, this very thought occurred to a young congressman named Richard Gephardt, who proceeded to do something about it. "I had just gotten to Congress," Gephardt explained to me recently. "Tip O'Neill, the legendary speaker, gave me the assignment to pass the debt ceiling [increase]." Back then, the ceiling was below $1 trillion, a fraction of the $14.3 trillion it is today. But Gephardt's job was difficult and lousy nonetheless. "We [Democrats] were in charge of Congress, but nobody ever wanted to vote for it. Republicans wouldn't give us votes, so it was our responsibility. Every time it came up I had to go to every member and seek their vote. It was painful and difficult and, I thought, unnecessary. I'd say to members, 'Did you vote for the appropriations bill? The defense bill? The highway bill?' They'd all say yes. And I'd say, 'Well, then you gotta pay the bill. If you didn't mean it, don't vote for it. Then you won't have to pay for it.'"

Gephardt realized that the easiest way to fix the problem and impose some rationality on the process, was to do away with the second vote. He consulted the parliamentarian. "I asked if there was a way that when we pass the budget [the debt ceiling] can be deemed 'raised' to accommodate the budget people are voting for," Gephardt said. "He said, 'Yeah, we think we can work that out.'"

Thus was born the "Gephardt rule." For a period thereafter, the adoption of the conference report on the budget resolution would trigger the Gephardt rule and "deem to have passed" legislation raising the debt limit to accommodate the spending and revenue levels approved in the budget. Presto! Problem solved.

This lasted right up until 1995, when Newt Gingrich took control of the House of Representatives. He overturned the Gephardt Rule, but the period when it was in effect shows pretty plainly that we really don't need this anachronistic way of legislating. No other country has such a separation between authorizing a budget and authorizing the borrowing necessary to pay for it. The United States did just fine without it all throughout the 1980s and beyond. We can do without it just fine once again, too.

We'll be much better off, in fact, because there won't be any hostage for the Republicans to take, even if they do take back Congress. Instead of relying on one ruling from a parliamentarian, codify the Gephardt rule into law. Just state once and for all: "When the federal budget passes and is signed into law, the Treasury is authorized to borrow whatever funds are necessary to pay for the budget."

Democrats are now going to have to pass a debt ceiling bill on their own, one way or another. That is now certain. So rather than raising the debt ceiling, they should instead just abolish it forever.

Presto! Problem solved. Forever.

-- Chris Weigant

 

Follow Chris on Twitter: @ChrisWeigant

 

16 Comments on “Abolish The Debt Ceiling”

  1. [1] 
    nypoet22 wrote:

    it's like.... pie! or like scrapping the cap on social security tax. either one.

  2. [2] 
    nypoet22 wrote:

    but mostly pie.

  3. [3] 
    andygaus wrote:

    I don't understand why, if we have a debt ceiling, it isn't enforced when spending bills are passed. If the spending cap is a billion and we've already allocated 999 million, then a bill to spend another 2 million should be declared out of order.

  4. [4] 
    MtnCaddy wrote:

    schmuckery?

    I knew schmuckery was a real word and a good general description of certain conduct. It's too good an invention for me to have dreamed it up and incorporated it into my vocabulary. Legions have surely beaten me to it.

  5. [5] 
    MtnCaddy wrote:

    It seems that the Debt Limit was concocted for the two world wars to give the President the authority, subject to the consent of Congress, to get the Treasury to issue debt quickly in the event of a national emergency. Newt "Spawn of Satan" Gingrich weaponized it starting in the mid-90s, and it's been a GQP cudgel ever since.

  6. [6] 
    MtnCaddy wrote:

    K, nypoet22

    SINCE we have Deathocrats and Republikillers, which, Sir, are you?


    A Piekiller?

    Or a Piecratic Anarchist? Pie-o-crat?

  7. [7] 
    MtnCaddy wrote:

    I read a Congressional Quarterly analysis of removing the cap and it would fund Social Security for the rest of the century.

  8. [8] 
    MtnCaddy wrote:

    [6]

    Help me out here. Please to explain, Sir. I'd hate to have to throw up hands and declare,

    (get ready for it)

    Humbug -- let them eat cake!

  9. [9] 
    MtnCaddy wrote:

    FPC
    [7]

    C. R. Stucki wrote,

    ...the guys responsible for naming plagues will move on the the Sumerian alphabet, or some such.

    Hey Stuck, if you're working the outraged Republican shtick these days, shouldn't you demand that it be the Chinese alphabet?

  10. [10] 
    Don Harris wrote:

    "One way or another, however, this situation is going to happen in the future. So why let it?"

    "...it doesn't have to be this way."

    What's usually lost in this debate is this situation is just a symptom of the two party system with both parties working for the big money interests.

    And that articles like this are part of the Kabuki theater.

    Treating a lone symptom does not make the problem go away.

    To make the problem go away you have to treat the CAUSE- the two party system with both parties working for the big money interests.

    And that means you have to stop being part of the show and start being part of the solution.

    TAKE THE VACCINE!

  11. [11] 
    Don Harris wrote:

    Mtn Caddy-
    The politicians are Deathocrats and Republikillers.

    The people that vote for them are Democrats, Republicans and independents that believe the lies from the Deathocrats and Republikillers that are pretending to be Democrats and Republicans.

    Nypoet only chose pie because "Let them eat cake" was already taken.

  12. [12] 
    nypoet22 wrote:

    don, you are criticizing pie for what it is not, instead of addressing the true issue of pie-based voting for what it is. when will your cake-based dodges end?

  13. [13] 
    Don Harris wrote:

    Nypoetb (12)-
    Cute.

    But still just trolling.

    Go away.

  14. [14] 
    Don Harris wrote:

    Nypoet-
    It is a shame that you choose to troll when you are capable of so much more.

  15. [15] 
    nypoet22 wrote:

    @don,

    a typical dodge. obviously you're unable to present a counter-argument to pie, so you just throw around accusations of trolling. nobody buys your cake-o-crat argument. it's all just obvious horse pastry.

    JL

  16. [16] 
    BashiBazouk wrote:

    But Don, after writing "hundreds of articles", you have proven capable of so much less...

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