Republicans, Democrats Agree Changes In Debt Policies Needed
There’s not much that Republicans and Democrats agree on in the current debt-ceiling standoff. But one thing that all sides accept is that the nation's legal borrowing cap has failed in its primary goal: limiting the nation's red ink. From Washington Deirdre Shesgreen of the Connecticut Mirror reports.
No one can anyone argue that the debt ceiling has served to rein in federal borrowing. The cap has been lifted at least 80 times and the U.S. government’s total debt stands at about $14.3 trillion.
"As a mechanism for controlling the debt it is obviously a manifest failure.”
That’s congressman Jim Himes, a 4th District Democrat and former Wall Street investment banker. Himes and others say this crisis should prompt a broader debate over whether the debt-ceiling is a well-intentioned policy gone terribly wrong, or a still-useful tool that needs to be tweaked.
Budget watchdog groups note that the debt ceiling has always been used to embarrass the party that controls the White House. But the current stalemate is a much bigger gamble.
Congress faces an Aug. 2 deadline, at which point Treasury officials have said they will not have enough money to pay the U.S.'s current financial obligations and will be at risk of defaulting.
But if you think this stalemate is bad, imagine how it used to work: Before 1917, Congress voted on each individual loan the U.S. Treasury took out and debate every time the government wanted to issue new bonds.
By the time World War I rolled around, that didn't make too much sense anymore. So lawmakers gave the Treasury Department more leeway and by 1939, the debt ceiling as we now know it was in place.
The debt ceiling is a cap on the legal authority of Treasury to borrow money-a mechanism that was supposed to allow Congress to keep a grip on the federal purse.
But it’s been raised so many times that lawmakers like Himes are arguing for an update.
"We ought to either do away with it or at least make the process honest … because right now everybody gets to vote for all the bills they love that spend more and tax less and then they turn around and vote against the debt ceiling."