On top of contentious leadership elections, nascent budget negotiations and a long roster of must-pass legislation, Congress can add another potentially painful debate: whether to raise the nation’s borrowing limit.
In anticipation of what has become a semi-annual showdown, lawmakers on both sides of the aisle are questioning how useful the budget tool is at limiting the growth of debt.
“It’s an archaic accounting device which has outlived its usefulness and creates political challenges and opportunities that I would like to see go away,” Sen. Dick Durbin (D-Ill.), the No. 2 Democrat in the Senate, said in a recent interview.
Sen. John Boozman (R-Ark.) is concerned about the national debt approaching $19 trillion, but he still shook his head when asked about how effective the debt limit has become.
“It’s just another crisis situation that affects the markets, things like that,” said Boozman, a member of the Senate Appropriations Committee. “One of things we simply have to do is get out of this crisis mentality.”
Raising the debt limit has nothing to do with authorizing additional federal spending. It only allows the Treasury Department to borrow more money to cover the costs of discretionary and mandatory spending that has already become law.
Nonetheless, raising the debt ceiling has become a regular flashpoint ever since Republicans ascended to the majority in the House in 2010 and sought to take a stand on what they considered to be a bloated federal deficit.
In August 2011, a standoff between House Speaker John Boehner (R-Ohio) and the White House over federal spending and deficit reduction nearly resulted in the government missing a deadline to raise the debt limit. While a deal was struck with a few days to spare, the down-to-the-wire drama led credit rating agencies to downgrade the nation’s debt.
Today, raising the debt limit has become a partisan issue. In a new Morning Consult survey, 65 percent of Republican voters say Congress should not raise the debt ceiling, while a narrow plurality of Democratic voters say Congress should increase the borrowing limit. Almost half of Democratic voters said failing to do so would risk an economic crisis.
But even while acknowledging the budget mechanism’s deficiencies as a debt-limiting device, some who are concerned about the deficit say that it has helped spur real efforts to rein in federal spending, which is what adds to the debt in the first place.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, called the debt limit “far from an ideal tool.”
“But it’s still the only limit you have,” she said.
“It has proved in the past, sometimes, to be something that’s a forcing mechanism to get us to reduce spending,” Sen. Bob Corker (R-Tenn.) told reporters Tuesday, noting that the 2011 Budget Control Act – what Corker called “the only thing to reduce spending since I’ve been here” – was passed in conjunction with that summer’s debt ceiling increase.
That law established discretionary spending caps that affect the federal budget and appropriations process to this day.
Donald Marron, a former acting director of the Congressional Budget Office who currently works at the Urban Institute, said that the debt limit was intended originally to save Congress time. Initially, Congress had to approve each debt offer one at a time; with a debt limit, lawmakers would only have to do so periodically.
“The idea of the debt limit as first constructed was to make things better,” he said.
MacGuineas said that the newest debt ceiling deadline, which Treasury Secretary Jacob Lew last week said would be Nov. 5, had sparked interest on and off Capitol Hill in pursuing larger budget process reforms, a prospect she called “completely a possibility” in the short-term.
Durbin, however, sounded a less optimistic note.
“No,” he said about a potential budget reform effort. “Not with a Republican Congress and a Democratic president.”