Someday soon, probably in May, Congress must vote to let the national debt exceed $1,079,800,000,000, the first trillion-dollar-plus debt ceiling and one that was supposed to be adequate at least until Sept. 30.
Alas, the Treasury will have to borrow more than that temporary ceiling permits to keep the government running.
Nobody knows exactly when that date will come, but when the Treasury has borrowed as much as it legally can, it will have to stop both borrowing and spending. Because revenue would keep rolling in, the Treasury would have a few days to maneuver before reaching a crisis. Three times in the past the Treasury has had to run in place for a few days while it waited for Congress to raise the temporary ceiling.
Thus, the problem coming up is not as serious as what could happen in a classic debt-limit crisis, which would occur when the temporary ceiling expires and the much-lower permanent ceiling kicks in. Under current law, if Congress did nothing, the permanent ceiling of $400 billion would take effect Sept. 30, and with the debt ceiling set that low the Treasury would have no room to play. It would literally be in default.
The debt ceiling, then, is certain to be a factor in the continuing battle of the budget because, as the debt gets closer and closer to the ceiling, Democrats can put more and more pressure on Republicans to work a compromise.
Despite all the smoke, heat and oratory that undoubtedly will precede the debt ceiling vote this time, it will be the 43rd time since 1955 that Congress has had to raise the roofbeam higher. Statutory debt limits have been in effect since 1917 and the current system has been in place since 1941.
Of course, if Congress had not already approved such things as guaranteed cost-of-living increases in Social Security payments, Trident submarines and food stamps without providing more money to pay for them, the debt would be lower. But it would not go away.
The Office of Management and Budget, in Special Analysis E to the fiscal 1983 Reagan budget, noted that "The government would have to borrow from the public even if the budget were exactly balanced, because it would have to finance the deficit of off-budget federal entities." (Those include agencies such as the Federal Reserve Board and the U.S. Postal Service that, by law, are not included in the budget but nonetheless have financial needs.)
Debt would continue to rise, OMB said, even if "the total government deficit were exactly zero and, as a result, the debt held by the public remained constant."
It's all very complicated, which is one of the reasons politicians seeking to oust incumbent congressmen can attack them for "voting to raise the national debt"--something the members had to do. "As a means of controlling spending," a long-time Congress-watcher noted, "the debt ceiling is a 100 percent failure."
Despite all this backing and forthing, however, the deficit is the key reason the current debt ceiling is too low to meet the need. The $1.079 trillion was adopted last September when the government was anticipating a $45 billion deficit in fiscal 1982. Now that figure is expected to be about $55 billion higher.
Attempts will be made to raise the new debt ceiling to cover fiscal 1983 as well, when another $100 billion deficit is projected. Thus, the best early working estimate in the executive branch of what will be necessary is an increase of $150 billion to $160 billion, which would bring the ceiling to $1.28 trillion.
Economists agree that the future of the republic does not rest on the height of the ceiling, because the American economy has more than adequate resources to meet its obligations.
As a percentage of gross national product, the total of goods and service produced in the United States, the national debt has been decreasing steadily since World War II, when it peaked at 70 percent at the end of calendar 1945. At the end of fiscal 1981, it was 27.8 percent.