By Mark A. Patterson and Tony Fratto
The world may have moved on from October’s shutdown and debt-ceiling fiasco, but the weapon Republicans used to bring the United States to the brink of an historic default remains intact. Nothing, save a fresh dose of common sense, will prevent lawmakers from again using this tool as leverage to try and extract 11th-hour concessions from the executive branch—perhaps as early as February. The debt ceiling is not the reason Congress is broken, but adopting a more sensible process for handling it would be a healthy first step toward fixing an institution that just doesn’t work anymore.
How did we get to this point, and why do we have a debt limit? Prior to 1917, the United States had no debt limit law. Each time there was a need for the government to borrow—for the Navy to build new ships, for example—Congress passed a separate authorization to do so. As the country grew in size and complexity, this became impractical for Congress, so it simply set an aggregate limit and adjusted it periodically to comport with the level of spending approved in separate legislation.
It should be noted that, while our national debt is currently much too large and must be reduced, every country needs the ability to borrow. Without deficit spending capacity, we would have been unable to build the great warships that enabled the United States to win the war in the Pacific in World War II. So, while a balanced budget is a helpful objective, it is not inherently wrong or inappropriate for the government, like most households, to carry some level of indebtedness. And in fact, the United States has run a deficit in almost every year of its existence.