The Renewal of the Debt Ceiling Debate
With experts saying that the U.S. Treasury department could be unable to pay its bills by mid-October, the political fight over raising the debt ceiling is about to begin anew. If history is any guide, however, the debate won’t keep the debt ceiling from going up.
A new piece from CNN.com looks at the basics of the debt ceiling issue and explains that it is inevitable lawmakers will raise the ceiling, both because they already have—nearly 80 times in the last 70 years—and because “they have no real choice if they want to avoid a U.S. default … which would hurt the economy and markets.”
“Despite some politicians’ incorrect assertions, raising the debt ceiling does not give the government a ‘license to spend more.’
It simply lets Treasury borrow the money it needs to pay all U.S. bills in full and on time. Those bills are for services already performed and entitlement benefits already approved by Congress. In other words, it’s a license to pay the bills the country incurs as a result of past decisions made by lawmakers from both parties over the years.”
Of course, not everyone agrees that the debt ceiling should be raised. A recent poll from NBC News suggests that close to half of the country (44 percent vs. 22 percent) would prefer Congress not raise the ceiling, and now, once again, the “stage is set for another round of conflict in Washington.”
“House Republicans – fueled by Tea Party supporters – are demanding spending cuts to accompany any debt-ceiling hike. And President Obama has said he will not negotiate when asking Congress to raise the debt limit for money it has already spent.
Raising the debt ceiling is a routine but also unpopular procedure that fires up the political opposition. Obama, when he served in the U.S. Senate, voted against it in 2006 and even called it ’a sign of leadership failure.’”
Time will tell if the U.S. will face another situation like it did in 2011, in which debate over the debt ceiling led to the country’s credit being downgraded.