What Debt Ceiling? Just Stop the Clock!

Kabuki theater has returned to Washington, D.C.

The statutory ceiling on borrowing was reached more than three weeks ago. The Treasury Department just stopped the clock on March 15. The total debt of the U.S. government remains at $18,112,975,000,000, which is $25 million below the statutory limit.

In due course Congress will take up the issue of raising the debt ceiling. That will open the gates for front-page stories about a divided Republican Party risking a default and crashing credit markets across the globe.

Republican U.S. presidential candidate Mitt Romney speaks during a campaign rally at SeaGate Convention Centre as a national debt clock runs in the background on September 26, 2012 in Toledo, Ohio. Credit: Getty Images

Some will try to use this vote to force policy changes such as ending Obamacare or unfunding President Barack Obama’s amnesty changes. The president will promise to veto any bill that does more than raise the ceiling.

The dance will play out for several days between the House and the White House. The Senate will stand idly by waiting for the House to act. The Senate will go along with anything since they view success differently than the House. The House considers “getting policy right” a success. Success in the Senate is getting “a vote.” They will vote for anything and then preen before the cameras telling us that they are the adults in the room.

The White House will hope for a bill from the House that they can veto and shut down the government. Union thugs will be prepared to surround memorials and parks to keep the “little people” (that would be you and me) from enjoying Yellowstone or the World War II Memorial. I’ve seen this play before.

In September 1995 I was asked by Rep. Chris Shays (R-Conn.) to join a meeting with Bob Rubin, President Bill Clinton’s economic advisor, to discuss the approaching end of our borrowing power and the need to raise the debt ceiling.

I asked Rubin to tell us precisely when the debt ceiling would be reached and what arrangements might be made to continue paying our bondholders if agreement couldn’t be reached.

Rubin was very specific. The ceiling would be reached in the second week in November and there was nothing the administration could do other than default on our obligations. He was lying.

A provision to raise the debt ceiling was included in the continuing resolution that was vetoed by President Clinton causing a government shutdown. In spite of being shut down, somehow we continued to service the debt and keep the government operating.

Rubin didn’t mention that the administration had met in August over this issue. They concluded that a shutdown was good politics. The union members would protest the mean spirited Republicans at the memorials and parks that would be shut down.

It worked!

AFP Photo/Karen BLEIERKAREN BLEIER

The media ran daily stories about how Republican intransigence was causing hardships for our citizens and in time Sen. Bob Dole (R-Kan.) took to the floor of the Senate to decry the hardships being caused. Cokie Roberts announced on the Brinkley show on Sunday morning; “at least there is one adult among them.”

The standoff ended in January and as soon as the debt ceiling was raised borrowing resumed to replace the monies that had been taken from other accounts.

Today the Treasury Department just pretends that there is nothing to see here. The debt clock is stopped awaiting Congressional action. That day will come and the dance will start all over.

This has happened before. In 2013 the Treasury Department reported the debt at $16,699,421,000,000 for months. That also was $25 million below the debt ceiling.

There was no curiosity in the media about the “stopped clock.” There were no stories of shutdowns or headlines about defaulting on our debt. That all returned when the Congress took up the debt ceiling debate. Then came the stories about economic catastrophe if the Republicans refused to yield to the president’s wishes.

I have a modest proposal. Congress should pass a bill repealing the statutory requirement to set a debt ceiling. It means nothing as evidenced by the “stopped clock.” The consequential votes are the votes that actually spend money. Borrowing to make the check good is nothing more than bookkeeping.

When a candidate promises to never vote to raise the debt ceiling he/she had better be prepared to vote against spending bills. How will that candidate vote on funding the troops? Anyone willing to vote to write the checks but then not vote to making the check good does not deserve your support.

An embarrassing example was the passage of the Ryan-Murray budget compromise in December 2013 that specifically called for an increase in the debt ceiling. There were 137 Republicans who voted for that measure who would vote a couple of weeks later against lifting the debt ceiling, including Paul Ryan.

Eliminating the debt ceiling would remove a campaign promise for some candidates, but it would also reduce some of the Kabuki theater we are forced to endure. Not a bad trade I would say.

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