The Debt Limit Isn’t the Problem. Spending Is.
Headline after headline during recent months has centered on the fight to raise the nation’s debt ceiling. Many emphasized a potential doomsday scenario that could unfold if the limit isn’t lifted or suspended by October 18. It’s gotten so bad, the Biden administration is even looking into what it would do if the impasse can’t be averted.
This fight, and these headlines, are as American as apple pie. The 2011 “fiscal cliff” and 2013’s fight over sequestration set the tone for much of the Obama years; once the GOP held power, it averted a fiscal standoff by hiking spending in return for a long-term suspension in 2019. The latest agreement, together with last week’s continuing resolution, follows this same path by avoiding a government shutdown and giving Congress an additional nine weeks to figure out funding for 2022.
While these short-term bridges may have avoided a government shutdown and potential default, they also undermine necessary government processes and will likely cost us more in the end. They are artificial crises whose only purpose is to dodge real questions about which spending should be prioritized.
It isn’t supposed to be this way. Each year, Congress is supposed to set a budget before authorizing and then appropriating funding to spend. Unfortunately, like the debt limit, this process—so-called “regular order”—also has become increasingly politicized and is rarely followed. Rather, lawmakers instead have opted to pass large, unaccountable omnibus packages or to kick the can via continuing resolutions that merely prolong uncertainty for markets, taxpayers and government agencies alike.
Budgets are important because they provide a blueprint for the nation’s spending priorities, and the budgetary process is meant to give individual spending items a public hearing. These hearings create transparency as well as platforms for expert feedback, value assessments, and the necessity of programs old and new.
The continuing resolution, on the other hand, prioritizes keeping the government running over making the right decisions that will lead to more robust and effective programs. Congress’s failure to conduct due diligence has turned public debates into a rush to shove money at things and declare “mission accomplished.” But all that is accomplished is duplicative spending, overlooked issues of fraud and mismanagement, and short-term political victories over long-term planning.
Consider the issue of military readiness. In 2018 alone, over 70 programs were stalled by stopgap measures, increasing the Pentagon’s justification to pursue off-budget funding via so-called “wish lists.” Continuing resolutions put political maneuvering over planning and prioritizing effective defense systems. For example, Air Force leadership prefers Boeing’s KC-46 refueler plane over Airbus’ A-330, mainly due to its fuel efficiency and size. However, it’s Airbus that has gained the support of Alabama’s congressional delegation by partnering with Lockheed Martin to assemble the A-330 in Mobile.
Americans don’t have to live with Whack-A-Mole approaches to self-created political brush fires, or the potential repercussions of government shutdowns and missing critical government payments. Only two other nations in the developed world, Denmark and Poland, have anything like our debt limit; the rest, from supposedly socialist Sweden to fiscal stalwart Switzerland, typically restrain their spending instead of borrowing. While the details differ, these countries limit spending based on how much revenue is anticipated, and if debt must be incurred to make up for unplanned differences, it’s addressed without brinkmanship.
Oversight on topics like these is nonexistent when Congress budgets by default and fails to act in the best interest of the nation. The constitutional duty to provide for the common defense plays second fiddle to the incentives of the dysfunctional system.
Washington’s current fiscal stalemate is not a new crisis and both sides of the political aisle bear responsibility. Substantial reforms and commitment to the budget process over political posturing are the key to good government, not short-term fixes.
The need for big-picture budget process reform will not go away after our recent deal to raise the debt limit. It’s a point we would be well-served to address before the next inevitable crisis threatens our economic and personal wellbeing.