The debt ceiling: It’s not what you probably think

Polls show that many Americans want Congress to refuse to raise the debt ceiling. In taking that position, they likely assume that increased borrowing would enable the federal government to find new ways to spend money. After all, when we raise our own debt ceilings — by taking out a mortgage or getting a car loan — we get to buy a new house or a new car. But the federal debt ceiling doesn’t work that way.

Unlike you or me, Congress does not apply for a loan and then decide to spend the money it borrows. Congress has already spent (or promised) to spend that money by passing a budget earlier this year. Now, if it fails to raise the debt ceiling, the government will not be able to make the payments that Congress has already taken on. It would be as if I took delivery of new furniture, promising to pay in six months. But then, I decided that I didn’t want to raise my debt ceiling, and so I didn’t pay for it.

Now, some argue that the government would not really default because it would still take in enough new tax revenue to pay bondholders. But government bondholders are not the only ones whom Congress has already agreed to pay. Those who receive Social Security, Medicare and Medicaid have been the focus of much of the discussion, but there are many others.

For example, if scientists at the Food and Drug Administration are laid off, new drugs cannot be approved. What about air traffic controllers? And then there are the secretaries, janitors and those performing jobs in every government department throughout the country. These are hardworking people who have done nothing wrong. How could we in good conscience refuse to pay them? And what about the military, including salaries and benefits for soldiers and veterans, including those who suffered horrific injuries fighting for our country? If the debt ceiling is not raised, some of these obligations could not be met.

Many probably think that some items in the budget are not good uses of public funds. And that is certainly true. Maybe we could simply refuse to pay those unwise expenses and still have enough to approve new drugs, pay soldiers and do the other good things that the government does. But who would decide which payments to make? And more importantly, promises have been made, and the government of the United States cannot morally break its promises.

Some history is relevant here, too. Dating back decades, every president, including Ronald Regan, has implored Congress to raise the debt ceiling after adopting a budget that spends the money. And since 1981, Congress has increased the ceiling nearly every year. There has only been one period of more than three years without an increase. At the end of President Bill Clinton’s second term, the government ran surpluses and began paying down the debt. From August 1997 through June 2002, the debt ceiling remained in place. But when President George W. Bush took office, Congress passed massive tax cuts without any spending cuts. During the Clinton years, the government followed the pay-as-you-go rule, requiring Congress to pay for any new program by cutting other spending or raising taxes. The Bush-era Congress abandoned that rule and raised the debt ceiling six times in the next seven years.

Personally, I believe that the government should create jobs during economic downturns by funding programs to build and repair roads, bridges, and government buildings, and expanding NASA and other agencies that innovate new products and technologies. Were it up to me, the government would keep spending until the unemployment rate falls below 6 percent. Then, it should return to the pay-as-you-go rule. But if one believes that the government is currently spending too much, there is a simple, moral solution. Identify areas to cut and pass a more limited budget. But don’t make a promise and fail to keep it. The U.S. should not operate that way.

Steve Semeraro is a professor of law at Thomas Jefferson School of Law in San Diego.

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