Raise the Debt Ceiling & Reduce the Debt

The Congressional Budget Office today estimated that the federal government will breach the debt ceiling sometime in the late summer or early fall, at which point the U.S. would no longer be able to pay all of its commitments on time and in full. Earlier this week, the Bipartisan Policy Center came to a similar conclusion.

The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget: 

Today’s projections from CBO are a clear warning sign: we are headed towards a debt ceiling breach, and we must raise the debt ceiling as soon as possible. A default would be a disastrous and unacceptable outcome. Ideally, lawmakers should combine a debt ceiling increase with measures to reduce debt, as they did with the Fiscal Responsibility Act and many other measures over the past several decades.

Lifting the debt ceiling does not authorize new spending; it accommodates the borrowing Congress and the President already approved. Thus, it should be a reminder to lawmakers every time they pass legislation authorizing more borrowing that the debt ceiling will have to be lifted again. Voting to borrow more and then voting against increasing the debt ceiling is the ultimate hypocrisy. A better approach would be to require lawmakers to approve a higher debt ceiling before they vote to borrow more, thereby linking those actions and consequences more transparently.  

Ideally, we would take this opportunity to renew the enforcement measures for the caps on discretionary spending, which expire at the end of this fiscal year, and enact a larger package of deficit reduction measures. But at the very least, raising the debt ceiling should not come alongside increases to the debt. Anyone who casts such a vote should relinquish any claims they have to caring about our fiscal health.