THIS WEEK the lame-duck Congress will have to raise the federal debt ceiling. For several weeks the Treasury Department has been doing the governmental equivalent of scrounging for spare change in the couch cushions to pay its obligations. Now, with the election safely past and Treasury at the limits of its ingenuity, lawmakers will do the inevitable and increase the government's borrowing authority by as much as $800 billion -- raising the debt ceiling to more than $8 trillion.
This will be the third time in three years that the debt limit has been increased, for a grand total of more than $2 trillion during President Bush's first term. The last hike was nearly $1 trillion, but it took less than 18 months for the government to hit the newly raised ceiling. By way of comparison, the entire federal debt in 1980 was less than $1 trillion.
There will be some noisy debate about this, only partly on point. The debt limit, as now defined, both overstates and understates the problem of the national debt. It overstates the problem by including not only what an ordinary person would think of as "real debt" -- the $4.3 trillion the government has borrowed -- but also money the government essentially owes itself. These are the "trust funds" to finance future obligations, such as Social Security and Medicare, that the government "borrows" from to pay its current bills. To the extent this reflects a debt, it's of a different sort from a Treasury bond. But if this is a debt, the ceiling understates the problem because the trust fund IOUs the government issues to itself don't come close to reflecting the full cost of its future commitments to those programs.
This much is beyond question: The government is living far beyond its means. The deficits it racks up year after year impede economic growth, burden future generations and force the United States to rely on foreign governments and investors. Since Mr. Bush took office, foreign holdings of U.S. debt have grown from 30 percent to 43 percent of the total, and 90 percent of the new debt has been purchased by foreigners. Meanwhile, as the government has to pay more interest on its debt, it has less for health care, education and other programs. According to the Congressional Budget Office, the government's interest payments are expected to more than double between 2003 ($153 billion) and 2010 ($319 billion); interest costs will account for almost 10 percent of federal spending in the next decade.
"We owe it to our children and grandchildren to act now," Mr. Bush said in his first State of the Union address. He was speaking about his plan to pay off over the next decade the entire $2 trillion in government debt held by the public. Now, instead of being eliminated, debt held by the public -- real debt -- is on track to reach $6.5 trillion by 2011. How do Mr. Bush and all the lawmakers who have enabled his irresponsibility plan to explain that to the grandchildren?