Experts weigh in on U.S. debt ceiling

Members of Womack’s committee hear calls for change in Congress’ approach

WASHINGTON -- Conflicts in Congress over raising the debt ceiling carry economic risks without providing similar benefits, experts told members of the Joint Select Committee on Budget and Appropriations Process Reform.

An Arkansas Republican, U.S. Rep. Steve Womack of Rogers, is the committee's co-chairman.

Congress periodically approves spending measures that drive up the debt. It votes separately on whether to raise the amount it can borrow to pay the bills.

According to a report by the U.S. Government Accountability Office (formerly the Government Accounting Office), "the debt limit does not control or limit the ability of the federal government to run deficits or incur obligations. Rather, it is a limit on the ability to pay obligations already incurred."

Article 1, Section 8, of the U.S. Constitution empowers the government to "borrow money on the credit of the United States" and also to "pay the Debts" that it owes.

The national debt recently surpassed $21 trillion. The Congressional Budget Office foresees a budget deficit of $804 billion in fiscal 2018.

Congress has increased the budget ceiling scores of times since it was instituted in 1917.

But stalemates in recent years have led to uncertainty.

In 2011, a standoff brought the federal government to the brink of default.

In the aftermath, Standard & Poor's downgraded the nation's credit rating for the first time. The Dow Jones industrial average dropped 5.6 percent in a single day.

Since then, lawmakers have sometimes struggled to reach agreement on additional debt-ceiling increases.

The uncertainty, critics say, undermines public confidence.

James Capretta of the American Enterprise Institute said the debt limit has "outlived its usefulness."

"Congress should get rid of it altogether because it really is a self-inflicted wound if we fail to pay our creditors," said Capretta, who serves as a resident fellow and holds the Milton Friedman chair at the conservative think tank. "If we can't do that, the budget resolution should become the vehicle for automatically raising the debt limit consistent with the budget levels in the budget resolution."

Joseph White, a public-policy professor at Case Western University, also called for change.

"It's time to eliminate the way that the debt limit encourages hostage-taking and brinkmanship," he said.

Bill Dauster, a former Democratic staff director and chief counsel for the Senate Budget Committee, said it's time to "de-weaponize the debt limit."

Borrowing a phrase from U.S. Sen. Sheldon Whitehouse, D-R.I., Dauster said the debt ceiling is "like a bear trap in your bedroom," adding, "Many, Republicans and Democrats alike, agree that now may be a time to end this drama."

He suggested returning to the Gephardt Rule, named after former House Minority Leader Richard Gephardt, D-Mo.

It automatically changed the debt limit when lawmakers adopted a budget resolution to reflect the additional spending, he said.

Alternatively, he said lawmakers could embrace the McConnell Rule, named after Senate Majority Leader Mitch McConnell, R-Ky.

It would enable "the president to suspend the debt limit for a period of time subject to a fast-track resolution of disapproval [by lawmakers]," he said.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said "crisis-driven budgeting," government shutdowns and default threats "create dangerous situations," comparing them to land mines.

Rather than eliminating the debt ceiling, she said it is time to overhaul it. She suggested requiring lawmakers to vote on debt-ceiling increases at the same time they're voting on measures that would increase the debt.

The Bipartisan Budget Act of 2018 called for creation of the joint select committee and gives it until Nov. 30 to "provide recommendations and legislative language that will significantly reform the budget and appropriations process."

In an interview before the hearing, Womack said he'd like to see an end to government shutdowns.

Congress needs to provide "certainty to the institutions that we represent and certainty for the people in the private sector that rely heavily on government to do its job," he added.

Womack, who is also chairman of the House Budget Committee, has said it's important for the committee to complete its task.

"We all recognize what the problem is. We're in agreement on the problem," he said Thursday. "What we are in search of are the solutions."

Metro on 05/25/2018

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