Democrats' out-of-control spending is the wrong way to grow the economy
The debt Ceiling: A broken mechanism
Why do we keep doing this to ourselves?
Congress finds itself in an all too familiar position: working against the clock to reach a deal on the debt ceiling. Failure to raise the debt ceiling would bring default on our nation's debt, and likely worldwide economic collapse.
I can't help but feel a sense of déjà vu as I remember this scene unraveling two years ago, and too many times to count before that.
The debt ceiling was created to put a cap on what the government can borrow - in order to pay its own bills. The government issues debt. Congress sets that debt limit. This explains why the debt ceiling needs to be raised or suspended continuously. According to the Congressional Budget Office, the government currently is $28.5 trillion in debt within this self-imposed limit. When the limit is reached, the Treasury Department can no longer pay its bills and risks defaulting on its own debt obligations.
Looking back at its own history, the debt ceiling has been raised over 100 times. What once may have been a helpful lever that could be used to in a thoughtful way is no more. That noble function, if it ever existed, is but a thing of the past.
Instead, it has become highly politicized, costly, and downright dangerous.
Even if the debt ceiling is ultimately raised, just the uncertainty alone is costly. During the 2011 debt ceiling negotiations, in which a compromise was struck only two days before Treasury's borrowing authority would be exhausted, the GAO found the delay in raising the debt limit led to an increase in Treasury's borrowing costs of $1.3 billion.
The debt ceiling does nothing but create pointless panic, harming workers and businesses that fuel our economy. Factoring in our current recovery from the pandemic economy only exacerbates this self inflicted crisis.
Many people have lost jobs or seen household incomes drastically cut. The June 2021 data from the Census Bureau revealed there are 25 million people who are unemployed, or who live with an unemployed family member. There is a lot at stake out there.
It's clear we need to do everything we can to protect the integrity and fabric of our economy. Our current process of "governing by a deadline" does the opposite. The debt ceiling, and the recurring havoc it brings, is a completely broken mechanism.
With Democrats in full control of the White House and Congress, we must seize the opportunity to finally fix this flawed policy - by simply getting rid of it. This is why I have introduced legislation, House Resolution 1041, to kill the debt ceiling once and for all.
The time is now to make this common-sense change. We cannot wait a few more years. We need to work together to implement smart fiscal policies that grow our economy, and don't threaten to destroy it.
It is long past time to permanently retire this sword of Damocles.
Boyle represents the 2nd District of Pennsylvania and is a member of the Budget Committee.