In his surprise deal with the Democrats to raise the debt ceiling last week, President Trump went one step further: He proposed getting rid of the debt ceiling entirely. It’s not a bad idea, but only if you control future spending.
“The president encouraged congressional leaders to find a more permanent solution to the debt ceiling so the vote is not so frequently politicized,” said White House Press Secretary Sarah Huckabee Sanders. Her comments came as the Senate voted 80 to 17 to approve the deal that would raise the debt ceiling and keep the government running until Dec. 8, while spending $15.25 billion on emergency relief.
What’s more, the real problem with the debt ceiling is that it is an effect, not a cause, of our true fiscal difficulty. The idea behind the debt ceiling is that Congress routinely and regularly spends far more money than it takes in, leaving the resulting fiscal gap to be filled by government debt. Without a debt ceiling and the accompanying political debates, the argument goes, there would be nothing to stop the government from raising its debt further.
But it really hasn’t worked all that well.
Since the debt ceiling’s enactment in 1917, the debt ceiling has been raised approximately 100 times, according to the Committee for a Responsible Budget. Since the 1980s, the actual debt “ceiling,” or limit has grown 20 times, from $1 trillion to the current $19.8 trillion. Total federal debt is more than 100% of the economy, and the burden is growing fast.