The Debt Limit “Controversy”

If you want to sum up the difference between Republicans and Democrats, it can be summed up in the just-resolved crisis with respect to the debt limit. One side is trying to hold America hostage, the other side is trying to govern in a reasonable way.

As it has been for a while, it’s the difference between sanity and insanity.

And yes, as predicted, this completely Republican-produced artificial crisis did get resolved at the very last moment. The bill that Biden signed yesterday was described as “bipartisan,” but it was really a Republican hatchet job. 

The bill cuts federal spending by $1.5 trillion over a decade (but fails to address the tax give-aways that put us in this hole), imposes stricter work requirements for food stamps (because why not punish the poor, whose lives are way too easy for the rest of us), claws back money intended for the IRS and claws back approximately $27 billion in funding to federal agencies intended to combat the coronavirus pandemic.

What is the Debt Limit

This has been covered in the media quite a bit, but let’s review it again. The debt limit is not the budget. It’s about future spending. It’s about paying for debt that the United States has already accumulated.

The United States had no debt ceiling before 1917. The United States first instituted a statutory debt limit with the Second Liberty Bond Act of 1917, which was intended to give the United States the ability to raise money to pay for expenses related to the First World War. (Before that Congress voted on each bond authorization, much like how state governments still do today.)

This system worked well for quite a while, but as we moved into the latter half of the 20th century, budgeting got more complicated and deficits bigger. In 1979, former House Speaker Dick Gephardt installed what became known as the “Gephardt Rule,” a Cpngressional rule that deemed the debt ceiling was automatically raised when a budget was passed. The rule stood until it was repealed by the Republican-controlled Congress in 1995.

Budget deficits began to increase dramatically under the two terms of former President Ronald Reagan, as his trickle down economic policies did not produce the revenues that his administration had guaranteed that they would.


Nevertheless, Democrats raised the debt limit 18 times in the 8 years that Regan was in office.

Eighteen times!

That’s more than two times each year. Then, still using the “Gephardt Rule,” Congress increased the debt ceiling nine times without controversy under the four year term of George H.W. Bush.

All of that changed when Bill Clinton became President and Newt Gingrich became Speaker of the House. The Republicans began what is now a long-standing pattern of trying to take America hostage to get their way. First, there was the United States federal government shutdowns of 1995–1996. Republicans also repealed the “Gephardt Rule,” and made debt limit increases part of the discussion over the budget and federal government shutdowns.

When George W. Bush was President the Democrats reinstated the Gephardt Rule and did not try to take the United States full faith and credit hostage in order to force their will on budget discussions.

Which is, of course, exactly what happened in the Barack Obama years. In the  2011 United States debt-ceiling crisis, Congress, the Republican majority in Congress demanded deficit reduction as part of raising the debt ceiling. The resulting contention was resolved on August 2, 2011, by the Budget Control Act of 2011. Under the “McConnell Rule,” the president was allowed to unilaterally raise the debt ceiling, which action could be overturned by an act of Congress; this would require a 2⁄3 majority vote in both houses over a Presidential veto.

We were back at it two years later for the 2013 United States debt-ceiling crisis, under which the debt ceiling was suspended in 2015 and 2017 until it was eventually increased.

And then, of course, Donald Trump. This man has contributed more to the deficit than any President before him, mostly because of the 2017 Tax Cuts and Jobs Act — which should really have been named the Tax Giveaways and No Jobs Act — where the alleged benefits once again failed to “trickle down” to the rest of us. These uncompensated tax cuts contributed to approximately 40% of our current deficits. Under Trump the ceiling was suspended three more times, in September of 2017, in March of 2019 and July of 2021.Congress did not impose any preconditions or require any spending cuts. 

And now that Biden is President Republicans have suddenly found “religion” again.

In summary, one side is reasonable, the other is ridiculous. One side is not willing to risk the full faith and credit of the United States, the other side is willing to take it hostage to get their way.

The Fourteenth Amendment

One final argument that should be noted is the question of how this debate is affected by the Fourteenth Amendment. That amendment is one of the three post-Civil War amendments that primarily dealt with the consequences of that war, but in section 4 the Amendment states:

Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. . . . 

Some legal commentators have argued that under this clause the President can order the federal government to continue to pay its bills, regardless of what the legislative debt ceiling is. This clause has never been interpreted by the Supreme Court, and whether that argument is valid or not is an open question.

It may be time to test that theory if the Republicans continue on insisting to hold the United States hostage over the debt ceiling so that they can get their way.

If Biden were to order this, it could be challenged by the Republicans. But they would have to go into court saying that they want the United States to go into default. 

If this question doesn’t get resolved, you can pretty much guarantee that any time the debt limit needs to be raised while a Democratic President is in office, the Republicans will try to force their will on the budget by holding the rest of us hostage.

About a1skeptic

A disturbed citizen and skeptic. I should stop reading the newspaper. Or watching TV. I should turn off NPR and disconnect from the Internet. We’d all be better off.
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