There’s an old saw about how the Air Force Academy got funding to build an airport. First, you build a school, spending all the money available on buildings and grounds, making a facility that will, in a 100 years or so, rival the ivy-covered walls of West Point. Then, with the coffers empty, you go to Congress asking, “How can we have an Air Force Academy without an airport?” Congress is shamed into borrowing the funds for a new and suitable airport. I don’t actually know if it happened that way, but it’s a good story, and set against the pseudo-crisis now arising in the debt limit situation, it’s perfectly plausible.
The Constitution empowers Congress, and only Congress, to authorize the government to borrow money in the name of the U.S. From the founding until 1917, Congress authorized each specific borrowing directly. In 1917, to finance the first World War, Congress changed the method by which the government could borrow money and established an aggregate limit on the amount of debt the government could obligate. The process followed today is for the government to spend whatever it wants, and for the Treasury Department to borrow automatically as much as it needs to satisfy the obligations, up to the debt limit.
After a series of financial crises of looming government shutdowns over an ever-increasing national debt, Congress in 2015 suspended the debt ceiling until March 15, 2017, when the debt ceiling was reimposed at the amount of the national debt as of that date, reported to be approximately $19.8 trillion.
The National Debt Clock gives the national debt at $19.9 trillion and rising at the rate of $1,250,000 per minute, now at $132.3 billion over the reimposed debt limit. Treasury Secretary Steven Mnuchin has written to Congress saying that the budget ceiling has been reached and he is taking “emergency measures” to temporarily defer certain payments pending yet another increase in the debt ceiling. The shut-down-the-government crisis isn’t here yet; it won’t raise its ugly head until late summer when the “emergency measures” are exhausted. Then, we will be witness to the same old argument — those inclined to spend without limit will accuse those who want to sustain the debt limit of irresponsible behavior, and vice versa, and the only losers will be the taxpayers.
The problem is that the debt limit is not a very effective method of limiting government spending, since it’s application is after the fact. If we are to reimpose fiscal restraint on a government that seems out of control, the restraint needs to come before the spending occurs, not when it’s time to pay the bill. We must wean ourselves away from the idea that there are no limits on what we can spend; in fact, there are limits, and if we are to restore and preserve the health of our country and our society, we must respect them.
The national debt limit should remain. Congress should establish a requirement whereby the Congressional Budget Office examines each major new proposal in Congress to determine if its implementation will likely violate the debt ceiling. If so, Congress must include in the proposal an appropriate increase in the debt ceiling and accept responsibility at that time. Further, major programs should be reviewed on an annual basis after implementation, and the actual results compared to projected results, with appropriate changes made in the debt ceiling or in the program itself based on this experience, either up or down. If this needs to be a constitutional amendment to have real teeth, then let’s do that.
Congress needs to do its job, which is to safeguard the health and well-being of the country and its people. To do that, it has to balance the desirability of any new proposal — social welfare, military, environmental, immigration or other — against the long-term ability of the country to sustain it. The time to do that is before the money is spent, not when the bill comes due.
William R. Compton is a resident of Bloomfield.