Congress Needs Short-Term Fix to Address Debt Ceiling, Spending

It’s the time of year when the prospect of a government shutdown looms over the horizon because members of Congress waited until the last minute to address the nation’s pressing fiscal needs. Now, Congress, after its record year of profligate spending, faces a shutdown and a showdown over raising the debt ceiling. The U.S. Treasury Department warns that if the debt ceiling is not raised, extraordinary measures to finance the debt will soon be exhausted.

If extraordinary measures are exhausted, the nation will default on its debt. That will lead to the cost of financing existing debt skyrocketing, causing even more spending problems and another massive downturn for an already battered economy.

The conflict comes from the fact that Senate Majority Leader Chuck Schumer (D-N.Y.) has floated including a debt ceiling hike in the partisan budget reconciliation package. However, that prospect is looking dimmer by the moment as moderate Sens. Joe Manchin (D-W.V.) and Kyrsten Sinema (D-Ariz.) have already expressed their opposition. Absent a reconciliation measure, Sen. Schumer will have to rely on Republican votes, something Minority Leader Mitch McConnell (R-Ky.) has already ruled out.

In a statement via tweet, McConnell said, “Let’s be clear: With a Democratic President, a Democratic House, and a Democratic Senate, Democrats have every tool they need to raise the debt limit. It is their sole responsibility. Republicans will not facilitate another reckless, partisan taxing and spending spree.”

McConnell’s statement, however, ignores the fact that many of the trillions of dollars that have put the nation in its current situation were spent during his time as Majority Leader of the Senate. Now that the bill has come due, McConnell wants nothing to do with the spending he championing while he had the ability to do something about it. Sadly, McConnell’s rediscovery of fiscal restraint comes after his party lost power in the Senate.

So, what can be done? Schumer and House Speaker Nancy Pelosi (D-Calif.) have proposed attaching a debt limit suspension through to the end of 2022 to a short-term government funding bill. This proposal misses the mark as well. If lawmakers go this route, the government will operate without a debt limit for almost a full year-and-a-half, opening the nation up to more out-of-control spending. It will also ensure that the next time this issue comes up will be at the end of congressional session during a lame duck Congress.

Both party leaders need to abandon their one-sided approaches. Schumer must forget the idea of tying a vital debt ceiling provision to a $3.5 trillion bill filled with partisan agenda items that will only ensure the debt ceiling is an issue again in the very near future. And, McConnell needs to reconcile with the fact that he and his party are just as responsible for the dilapidated state of America’s fiscal affairs as his counterparts on the left.

The near-term solution is a clean increase of the debt ceiling that will get the country through to the New Year. There must be a new debt limit number attached, not a full suspension. It need not come with any other strings attached, although some spending constraints would certainly be welcomed. Lawmakers need some breathing room to prioritize certain spending is covered by tax revenue and figure out a way to ensure looming default on critical obligations is no longer a perpetual problem. To be clear, a debt ceiling increase should be sufficient to go through but not beyond early 2022. There must be a public vote on the issue of our debt prior to the 2022 legislative elections. This issue has come to a head and the American people deserve to get their leaders on record.

Raising the debt ceiling may seem like an odd way to get the nation’s fiscal house in order. However, with the recent burdens American businesses and families have taken on from the pandemic lockdowns, now is not the time to default on the obligations made to covert  recklessness of Washington lawmakers. Such would punish the very people least responsible for our current fiscal madness. The last thing the economy needs is additional boat rocking.

We may eventually reach the point where our lawmakers need to learn the consequences of their reckless spending the hard way. Now is not that time. For now, both parties need to focus on cleaning up the mess they both created. That begins with honoring America’s obligations to its creditors and hard bipartisan conversations about spending habits.

Daniel Savickas is Manager of Government Affairs at Taxpayers Protection Alliance.