Debt Ceiling 2013: Here We Go Again
Republicans in Congress met this week to develop a strategy for dealing with the next round of debt ceiling negotiations, expected to reach a boiling point this summer. As the Republicans consider what form their ultimatum to the president will take — default or entitlement reform, default or tax cuts — the stage is being set for another round of the ongoing debt ceiling crisis which, since 2011, has done little to address the actual debt.
If anything, it has added to the debt; for talk is not always cheap in Washington. According to a study released by the Government Accountability Office, 2011’s debt ceiling crisis will cost Americans almost $20 billion in higher borrowing costs over ten years. As the economic recovery remains sluggish, uncertainty over Washington’s fiscal policy is held to be at least partly responsible. If Washington’s inability to conclude the debt ceiling debate is costing us billions, is it even worth having?
There is bipartisan consensus that the debt is out of control, and the debt ceiling debate is, ostensibly, a debate about the public debt. Although raising the debt ceiling does not increase the government’s financial obligations, it does allow, in the words of Wyoming Senator John Barrasso (R), “a moment of reflection” to consider how all that debt piled up and what can be done to stem the tide. Because of the government’s entitlement obligations, most of the money that gets spent in Washington is on autopilot. Voting to raise the debt ceiling is less a reauthorization of a bill passed two weeks ago than it is a periodic check on the state of entitlements passed generations ago. During a recession that has drastically reduced the amount of money the federal government takes in every year, the debt ceiling debate is one of the few opportunities Washington has to stop and reassess the state of its finances.
To the more cynically-minded however, the debate is about anything but the national debt. Since its inception in the late 1930s, political parties have used the debt ceiling to oppose existing fiscal policies. In the 1950s, Senator Robert Byrd (D) of Virginia vowed to do “everything in his power” to block an increase, and the Eisenhower administration was temporarily forced into borrowing from private banks to fund defense expenditures. From tax increases to Medicare “reform,” the debt ceiling debate has become the arena where competing party agendas come more to play a game of chicken than to reduce the national debt. Absent a culture of political compromise, both parties have used the culture of crisis in Washington to move their agendas forward, with only mediocre results.
The debt ceiling has cost America millions of frayed nerves and billions in higher borrowing cost, but all that it has given us is cuts in discretionary spending. There has been no entitlement reform, no tax reform, no reassessment of defense spending. By their own admission, Republicans concede that there is no more discretionary spending to cut. If the debt ceiling debate has the power to force legislation on entitlements, defense spending, and the tax code, we will know in a few months. Either the debt ceiling debate will finally get America something, or Americans will realize that perhaps the one thing that needs to be cut is the debate itself.