JUST OVER a year has passed since Feb. 9, 2018, when President Trump signed a suspension of the statutory limit, then $20.5 trillion, on federal debt. As if to mark the occasion, the Treasury Department has just reported that the debt is now more than $22 trillion for the first time. The good news is that debt-limit suspension allowed this to happen lawfully. The bad news is that it happened.
And the worse news is that the debt-limit suspension expires on March 1 — just 11 days from now. As it has done many times, the Treasury Department can juggle accounts to avoid a default, probably until midsummer, according to a recent analysis by the Bipartisan Policy Center. At that point, default could once again loom if Congress and the president get into a wrangle over deficits and debt. Or they might agree to another temporary solution, like last year’s suspension.
Better for lawmakers to end the charade. Debt-limit laws originated more than a century ago, when Congress switched from voting on individual bond issues to authorizing an overall level of borrowing. In theory, debt-limit votes provide accountability on the issue of debt in general as opposed to specific tax and spending measures. In practice, the United States has accumulated a large structural debt that is on course to grow at $1 trillion per year, barring major policy changes. And partisan polarization has risen to the point where it’s in politicians’ interest to posture by opposing debt-limit extensions, even at the risk of an economically destabilizing default. Under President Barack Obama, Republicans in Congress staged two debt-limit showdowns to make him do their bidding on domestic spending and health care.
Sens. Jeff Merkley (D-Ore.) and Tim Kaine (D-Va.) proposed a prudent fix on Tuesday. Under their plan, the president would review the spending Congress has approved at the beginning of each fiscal year, then propose a new debt limit to cover it. This ceiling would apply unless, within 15 legislative days, Congress passed a joint resolution of disapproval — subject to presidential veto. If, during the year, the federal debt reached within $250 billion of the limit, the president would issue an explanation and request a higher limit, and the approval process would be repeated.
For all intents and purposes, this would enable the president to enact any debt ceiling he deemed necessary, unless a two-thirds majority of both houses objected. A measure of congressional accountability would be preserved in the potential disapproval resolutions, but these political moments would not create economic risk, except in rare situations — when, presumably, objections to increasing the debt would be most justified. The true congressional accountability comes earlier in the process, of course; if legislators don’t want a higher debt ceiling, they could approve higher taxes or less spending. But lately they’ve preferred to avoid those hard votes while posturing on the debt ceiling.
The clever part, politically, of the Merkley-Kaine proposal is that it resembles a mechanism Senate Majority Leader Mitch McConnell (R-Ky.) devised in 2011 to help shift the political burden of debt-ceiling increases to Mr. Obama and Senate Democrats. Though a permanent measure, the first application of the Merkley-Kaine idea would put President Trump and his Republican allies on the spot. Given the role of their tax policies in increasing the debt, that doesn’t seem unfair.