Treasury Secretary Janet Yellen recently announced that the U.S. government reached the debt ceiling on January 19 and initiated extraordinary measures to avoid default, extending the debt ceiling increase deadline to June. On cue, the Biden Administration and its allies on the left have demanded that Congress pass a stand-alone increase in the Nation’s debt limit without instituting any reforms whatsoever. This demand comes despite the fact America is facing World War II levels of debt and higher interest rates that increase the amount of American taxpayer money that is sent to China and other international creditors.
The big spenders on the left are making this take-it-or-leave-it demand even though Americans across the country are tightening their belts. Higher interest rates are worsening what Secretary Yellen has already admitted herself is an “unsustainable fiscal path” for the federal government. To achieve its goal, the Left is resorting to a false analogy to shroud its own extreme position while trying to label conservatives the unreasonable ones for seeking to negotiate on some common-sense reforms. (RELATED: GROVER NORQUIST: Six Steps Republicans Should Take On The Debt Ceiling)
The Left’s analogy is simple: because the spending has already occurred, raising the debt ceiling is just a matter of paying the bill that has already come due. When former President Barack Obama was battling over the issue in 2013, he framed his argument this way: “You don’t go out to dinner and then eat all you want, and then leave without paying the check.” But this analogy conveniently misses the mark and rigs the political debate in favor of unchecked reckless spending. Now is the time to correct this analogy and the historical record that feeds into it.
The previous leftwing-dominated Congress used the national crisis to dramatically grow the size of government relative to the size of the economy. Its actions were the equivalent of showing up to an overpriced restaurant and ordering a seven-course meal and expensive wines (like the Inflation Reduction Act that actually fuels inflation) on someone else’s credit card without bothering to check the balance. Then, the real credit card holder shows up mid-meal, learns the card is about to be maxed out and is demanded to call the credit card company to raise the limit. On top of all that, the real cardholder must continue to hand over the credit card to the same parties for future outings without any change in arrangements.
Though the patrons must pay the bill for the food the kitchen has already prepared, might it be reasonable for the credit card holder to demand that some of the items already ordered but not yet prepared be canceled? Or that, going forward, agree ahead of time whether certain items should no longer be ordered? Clearly, these would be reasonable and frankly mild requests for the credit card holder to make. And in this example, the ultimate credit card holder is the American people whose taxpayer dollars are on the line.
In short, it is entirely appropriate for the new congressional majority to negotiate with the Biden Administration on a debt ceiling bill that claws back some of the money recently authorized but not yet spent. Importantly, any talk of prioritizing which already-incurred bills should be paid first must be put to rest. America always pays its bills, but it absolutely can and ought to cancel or modify some of its planned spending.
In addition, the country needs to get out of the cycle of spending now, hiding the true cost to taxpayers and then creating political showdowns over it later. From now on, if politicians want the kudos for spending that they think will be popular, they should also accept the immediate accountability of raising the debt limit for any of that spending that increases the deficit. Doing so would enable the American people to judge whether the spending is worth the added debt.
To return to the analogy, just as credit card companies intermittently check in on a borrower’s income and overall financial situation when adjusting a credit card limit, it is also reasonable for the American people to monitor Congress’ spending choices to ensure responsible habits. Nowhere in the private sector can borrowers demand a no-strings-attached credit limit increase from creditors, so why should it be different for the government?
The first step toward addressing our “unsustainable fiscal path” is admitting government has a problem. By refusing to negotiate or take any steps toward reform, the Left is acting like the hostage takers, not the conservatives, who are working in good faith to simultaneously raise the debt limit while assessing spending in the queue and instituting broader reforms.
Michael Faulkender is the chief economist at the America First Policy Institute and former assistant secretary for Economic Policy at the Department of the Treasury.
Aaron Hedlund is the director of research at the America First Policy Institute and formerly served as the chief domestic economist and senior adviser at the White House Council of Economic Advisers.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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