Ready for Another Debt Limit Fight?

Yes, it’s time to talk about the debt limit again.

Every time the U.S. bumps up against its debt ceiling, we start the cycle all over again. President Obama insists he won’t negotiate over the debt ceiling, but of course he will. Members of Congress grandstand about changing this vicious cycle, and then most clamber for the easy way out so they can return to matters they’d rather talk about, which is just about anything but cutting spending.

Meanwhile, federal spending continues its out-of-control expansion, and the debt clock keeps ticking.

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We will hit the debt limit again on May 19. Treasury is expected to exhaust its cash management tools sometime in September or October. In the meantime, Washington’s periodic debt ceiling ritual will play out. Whatever happens, the debt limit should not be raised unless we are put on a path to balance the budget in 10 years. That’s the bottom line.

Debt ceiling fights are always about leverage—Members of Congress want to use the vote to extract concessions from the other side, usually the President. For example, tax reform is a much-needed pursuit, but it’s not the answer to the debt limit. Tax reform, done well, should strengthen the economy and produce more revenue, but it obviously cannot cut spending—and excessive spending is the near-term and the long-term problem.

Heritage’s J.D. Foster, the Norman B. Ture Senior Fellow in the Economics of Fiscal Policy, says that tax reform needs to proceed on a separate track. When it comes to the debt limit, Congress needs to stay focused on its responsibility of budgeting:

The House of Representatives, in passing the Ryan budget, memorialized its commitment to balancing the budget within 10 years. Simple as it sounds, achieving that consensus was a major accomplishment, and achieving the result will be a major undertaking. The debt limit debate provides the next venue for taking concrete steps to reduce spending consistent with the commitment.

Recent news on the recovering economy is welcome, but the editorial board of USA Today is right on the money:

Should we chill the champagne? Should we take our cues from liberals who say it’s time to stop worrying about debt and focus on job creation and investment? Should we conclude that, even as President Obama and Congress careen from crisis to crisis, they are solving America’s fiscal problems?

The answer is: none of the above.

Why? Because “Congress and the White House have yet to address the core problem fueling long-term deficits: the automatic and runaway spending on health care and retirement benefits.”

Exactly. Reforming entitlements and cutting spending—while funding America’s vital defense needs—should be top priorities. The debt limit is an imperfect vehicle, but right now it appears the best we have for making progress on spending reductions and deficit-reducing entitlement reforms.

 

 

8 responses to “Ready for Another Debt Limit Fight?

  1. Here we go again, how could we even talk about the debt cieling; when we still don’t have a budget for the past five years?

  2. I honestly believe there is no true way to fix the economy and the billions the world is in debt t itself. Money will be the downfall all of human kind. I have no doubt about that.

  3. Its scary to even begin to think about how badly our country is in debt. What I also wonder is how they allowed it to get this bad. There needs to be a balanced budget and it actually needs to be put to use not just talked about. We are continuing to dig ourselves in a deeper hole and that needs to stop.

  4. I believe that no matter who is in congress this nation is way to big and therefore we will always have a debt. Yes, maybe there are things that can be done to lower the debt but theres always going to be issues because no matter what is done there will always be different sides and opinions.

  5. Spending is out of control. I wonder if the budget is even being used here. To have a budget and to use a budget are to completely different things.

  6. Why do we keep electing incompetent morons who get elected for shit like “we won’t allow gays to get married.” or “we will get rid of all the citizen’s right to defend themselves.”… “Sir, what are you going to do about our debt crisis?”… “FAGGOTS AND GUNS ARE BAD!”

    Trillions of dollars in debt, growing constantly every day, MOST of the money is actually the government owing it to it’s citizens, not even OTHER countries but the people themselves. This is slowly turning into a communistic society, take money from people who earned it and try to spread it out to everyone.

  7. I really don’t understand this whole national debt thing. I guess the U.S. borrowed money from other countries, but I will need to research what exactly we borrowed the money for. All I know is that whoever is in charge of managing the national debt must be really stressed out! I’m just glad I don’t have a job like that. Also, I wonder what exactly are the dangers of a huge national debt? How does it affect us? Does it mean that we pay higher taxes when it hits the debt ceiling?

  8. Those who have come before me and those who are currently in office have failed this nation. The citizens of this nation, for the most part, are oblivious to this country’s current state. This debt is like venom that has eaten away at our very innards. We are but a hollow shell of this nation’s former glory. Thomas Jefferson, our founding father, has said, “I, however, place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be feared.” He is right, and Administration after administration has failed to uphold this truth. It has been speculated that the U.S. government will attempt to pull off an operation like Cyprus’s cash grab; they stole people’s hard earned money and assets, so that they can pay off their debts. I foresee this event occurring here as well.

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