FALL 2013
DOMESTIC
Full Faith and Credit
What can be done to prevent Congress from threatening the
United States’ fiscal health for the sake of political gain?
T
his fall, America came within
hours of hitting its debt limit,
which would have resulted in
an unprecedented default on American
debt service payments. It is unclear what
the specific repercussions of a default
would be, but they would undoubtedly
threaten the fragile recovery from the
Great Recession. Regardless, the possibility of default only exists due to the
political brinkmanship that has become
the norm in Washington. In the past
few years Congress, and the Republican Party in particular, has resorted to
using the debt ceiling as merely another
bargaining chip for advancing partisan
policy goals. Desperate, last-minute
negotiations cannot become a prerequisite for raising the debt ceiling or the
United States could lose its position
as the world’s economic anchor. Fortunately, the government can reverse
the transformation of what was previously a formality of fiscal policy into a
weapon of economic mass destruction.
A legislative limit on the federal
debt has existed since the Second Liberty Bond Act was passed in 1917. The
Government Accountability Office defines the debt limit not as the ability to
control deficits or incur debt, but as a
“limit on the ability to pay obligations
already incurred.” Since then, Congress
has never failed to raise the debt ceiling; between 1960 and 2011, there were
a total of seventy-eight debt ceiling increases. Many of the increases passed
on party lines, but none of them pos-
by CADE BAXTER ‘16
sessed the sort of political vitriol that
first appeared during the 2011 debt ceiling debate. Indeed, none came with the
preconditions regarding spending cuts
that Republicans insisted upon in 2011.
The debt ceiling fight in 2011 turned
into a major public relations debacle
for both parties. According to CBS
News, near the end of the negotiations,
fifty-eight percent of voters disapproved
of the Democrats’ handling of the situation, while an astounding seventy-one percent disapproved of the Republicans’. In
the October 2013 debt ceiling debate, polling data suggested an equally dismal view
of the parties and the positions to which
they steadfastly clung. Nearly two-thirds
of Americans believed that failure to raise
the debt ceiling would be a “real and serious problem,” compared to fifty-five
percent in 2011. Perhaps this increase
in anxiety over the debt ceiling was a
result of fallout from the 2011 fight, of
which the most visible consequence
was the embarrassing downgrade
of America’s credit rating by Standard and Poor’s. The agency attributed
the downgrade not to an inability of the
U.S. to pay its obligations, but to
the political dysfunction that
now characterizes the
federal government.
The increase
in disapproval of
both parties due
to battles over the
debt ceiling, while
surely demoraliz-
ing for Democrats, has been far more damaging to Republicans. This should offer the
Republican Party even more incentive to
search for solutions that precludes the partisan bickering that has become the new
norm for debt ceiling negotiations. With a
year until the next midterm elections, Republicans find themselves in a quandary:
voters now prefer a Democratic-controlled
government over a Republican-controlled
government by eight percentage points. If
every debt ceiling debacle is as damaging
to the Republican Party as the past two,
the party may find itself unelectable on
the national stage. To protect their political standing, they must forego their use
of the debt ceiling as a bargaining chip.
But what steps should the government take to divorce partisan politics from the
nation’s fiscal health?
Several
proposals
have been suggested,
most focusing on extra-legislative means
to override Con-
Gage Skidmore
21