Of all the reforms in House rules secured by the conservative rabble–rousers earlier this month, arguably the most momentous was the promise that Republicans will not pass any debt ceiling increase until substantial budget process reforms and spending cuts are secured.
The need for such a rule would seem self-evident. The debt has risen by some $4 trillion in just two years.
Government borrowing last year hit 13 figures, or $1.4 trillion. Absent budget reforms, we could easily see a decade ahead with another $10 trillion added to the debt. And don’t forget, every one-percentage-point rise in interest rates by the Federal Reserve raises the debt by much more than a trillion dollars over the next decade.
So budget hawks and those concerned about our national debt should be applauding this commitment.
Hardly. Instead, President Biden, Senate Majority Leader Chuck Schumer, the entire Washington special interests, are collectively sounding a primal scream that we will have economic Armageddon if there is even a hint of the debt limit expiring this summer.
If we are to make any progress on reducing the debt crisis, Speaker McCarthy must use the debt ceiling vote as the bargaining chip to secure spending reductions and reforms.
The New York Times hyperventilated earlier that “Breaching the debt limit would lead to a first-ever default for the United States, creating financial chaos in the global economy. It would also force American officials to choose between continuing assistance like Social Security checks and paying interest on the country’s debt.”
This is upside-down logic. The nation’s good credit standing in the global capital markets isn’t imperiled by not passing a debt ceiling. The much bigger danger is that Congress does extend the debt ceiling, but without any reforms in the way Congress grossly overspends.