The big talk in Washington these days is about the debt ceiling. The US government is currently spending more money than it takes in, more than $4 billion a day. That sounds like a lot, but it’s only about $50 a day per family. That doesn’t sound so bad, but isn’t it more than you spend on food? And that’s money they’re spending over what they’re already getting. So add that onto the taxes you are already spending.
So here’s the deal. The US is not allowed to borrow money unless it has been approved by Congress. Approving this many loans is hard work, so Congress created what is called the debt ceiling. They’ve said, all right, you can borrow this much money, from wherever you can get it, and spend it on whatever you want, but you can’t borrow any more. The problem is, we keep borrowing, so eventually, we hit the ceiling, so Congress needs to raise the ceiling again or the US can’t pay its bills, like the interest on all that debt. So there really is no ceiling.
So next Tuesday, we’re going to hit the ceiling again. If Congress doesn’t raise it again, the US won’t be able to borrow any more money, so they’re going to be short about $4 billion a day.
Just about everyone seems to agree that we need to raise the ceiling. If we don’t, we may not be able to send out Social Security checks to the seniors. We won’t be able to make payments on all of the debts we have already. And you know what happens when you don’t make your payments. No, they won’t repossess the country. But it will hurt our credit rating. And that means interest rates will go up. They go up for the Fed if we ever want to borrow money again. They go up for business loans, home loans, and our beloved credit cards. The argument goes that this will hurt business, cost jobs, and hurt our already ailing economy. President Obama calls it financial Armageddon.
So everybody agrees. Why don’t we raise the ceiling? Well there is this pesky new group of congress called the Tea Party. They have this whacky idea that we can’t keep borrowing more and more and never paying it back. They believe that we should do something called living within our means. They agree that we have to pay our bills, that the debt ceiling should go up. But we have to make some changes. They want us to cut the runaway spending, and to add a balanced budget amendment to the Constitution.
So what is a balanced budget amendment? It means we’d add a clause to the Constitution saying that the government can’t spend more money than it gets. Most of the states have a balanced budget amendment. So do Germany and Switzerland. To create a balanced budget amendment, it would first have to be approved by two-thirds of both houses of Congress. Then, the legislatures of 38 states would have to approve it as well. Even if this were possible, it could take years. The bill of rights took two years to be ratified. The 27th amendment took more than 200 years. Even after this happens the amendment wouldn’t take effect for another five years. Meanwhile, we’d be going further into debt, increasing our interest obligations, and reducing what would be left over to pay for other things like national defense and air traffic controllers.
But here’s a little secret. We don’t need a balanced budget amendment. We can have a balanced budget next Tuesday. How? Don’t raise the debt ceiling. If the US can borrow any more, then they can’t spend more than they take in. This will call for some tough choices, but tough times call for tough choices. Social Security checks would go out, at least for a while. There is a trust fund for Social Security with billions of dollars in it. It can’t be diverted for other purposes. We’d probably still pay the paychecks of the military, but we might have to bring them all home. Maybe this is a good thing, since the current Commander in Chief doesn’t seem interested in winning anything. Obama-Care? What’s that? NPR can survive on its own. Maybe we’d have to skip the Cowboy Poetry Festival for a year. (Don’t believe our Prince Harry. Those people would still exist.)
Yes, there would be some tough choices to make. The beauty of this plan would be that the people now in office would be the ones that would have to make them. The tea-partiers say that we don’t have a tax problem, we have a spending problem. There’s some truth to this, but the real truth is that we have a procrastination problem. Everyone talks about spending less, but nobody ever does anything about it. Congress is in constant campaign mode. They want to add exciting new programs, not get rid of them. They want to get reelected. Obama is on record as saying that he will veto a bill unless it raises the limit long enough to get past the next election. Even most of the spending cuts the tea-partiers are lobbying for are 5 to 10 years away.
Maybe interest rates would go up. Maybe they wouldn’t. We have enough revenue to pay our debts if we decide that’s important. And, guess what? If we don’t borrow any more money, we don’t need to worry about the interest rates. Our creditors will feel much safer is we are paying our debts than if we keep digging a deeper hole.
The time for rhetoric has passed. It’s time for some action. It’s time to make some tough decisions.
Leave the ceiling in place. Let congress vote, one at a time, for the programs they want to fund. (News flash: The Appropriations committees do this already. But they relegate most of this busy work to non-elected staffers.) If the House and Senate can’t agree, it must not have been very important. Cut! If the president doesn’t agree, he’s got his veto. If Congress can’t override his veto, it must not have been very important. Cut! When the revenue is all spoken for, we’re done. If the cowboys still get their poetry festival, good for them. If not, it must not have been very important. If we, the people, don’t like the choices made, we have an election coming up next year.