It happens like clockwork in Washington. Every year or two when we approach the federal debt limit, countdown clocks start, doomsday scenarios are assumed, and backroom negotiations begin in earnest to prevent our country from defaulting on our obligations.
The prevailing theme of debt ceiling negotiations is usually avoiding default. Lost in the conversation is how we got here in the first place, and how we can get out of the cycle of deficit spending.
Debt limit debate should push Congress to address our growing debt. I, along with some of my colleagues, have created annual government waste reports to provide clear examples of areas to cut or reform.
But the original intent of debt ceiling votes was to discourage or prevent our nation from getting into more debt. At this point, the debt limit conversation has created so many headaches that some have advocated a total repeal of it.
Since no other country in the world has a "debt limit," it would seem that it would make sense to repeal it – but the problem of growing deficits still remains.
As the debt ceiling is currently constructed, it is nothing more than an arbitrary political tool that tends to produce more crisis theater than reform. Budget experts on the left and right have increasingly come to the conclusion that the debt limit no longer prevents, curbs, or restrains debt.
However, instead of repealing and eliminating the debt limit authority, Congress should reform it to make it a legitimate legislative mechanism to fix our nation’s massive debt problems.
Here’s an idea: Instead of setting an arbitrary deadline, the debt limit could become “date certain” and could be raised quickly only if the deficit is going down.
For example, the debt limit could increase every two years with a signature from the president if the deficit has been reduced to a preset target. However, if the deficit has not reduced to the preset target in the past two years, Congress would be required to debate the issue and raise the debt limit through regular order.
A checkpoint with targets could create a stronger pattern of fiscal accountability between debt limit deadlines, while still drawing attention to our nation’s massive debt problems, if the goals are not achieved.
This forward-looking date-certain debt limit reform would provide a transparent avenue to course-correct when the preset targets are missed. It would also provide an incentive for Congress to decrease the deficit and predictability for world markets when our deficits decrease.
The statutory debt limit is the only mechanism that serves as a proxy for disastrous fiscal mismanagement. But the U.S. debt challenges need more checkpoints than simply tripping over a randomly set deadline when Congress tries to avoid a self-inflicted catastrophe.
Those who want to do away with the debt limit argue that Congress is merely voting again to fund things that have passed years or decades before. That would be a reasonable point, except that most sitting members of Congress have never voted on most of the mandatory spending policies. And only a few members who voted for the last comprehensive tax reform in 1986 are still in Congress.
The debt limit does not have to be arbitrary. Thoughtful and enforceable targets would force Congress to actually address the real problems that cause our debt. We can argue about how to address the debt, but it absolutely should decline. The fact is, today’s politicians want to impose the consequences of over-promising on future generations rather than on the present Congress. That can – and must – change.