Raising debt ceiling wasn't always a heated source of debate
Raising debt ceiling wasn't always a heated source of debate
This week, Democrats pushed through a measure to raise the debt ceiling, to avoid a default on the nation's debt. But how did the debt ceiling become such a hot-button issue on Capitol Hill?
SACHA PFEIFFER, HOST:
In Congress this week, a familiar fight over the national debt.
(SOUNDBITE OF TV SHOW, "THE NEWS WITH SHEPARD SMITH")
SHEPARD SMITH: The Senate just voted to raise the national debt limit as the clock ticks down on the United States' ability to pay its bills.
UNIDENTIFIED PERSON: On this vote, the yeas are 221, and the nays are 209.
PFEIFFER: Democrats pushed through a measure to raise the debt ceiling by $2.5 trillion to avoid a default on the nation's debt. On Thursday, President Biden signed the deal. It lasts into 2023, at which point Democrats and Republicans will once again face a heated debate over borrowing. That move to raise the debt ceiling is something Congress has approved nearly 100 times already, dating back to the World War I era. It's a move NPR's Ron Elving says was once routine but has evolved into yet another hot-button political battle. Ron is with us to explain. Hi, Ron.
RON ELVING, BYLINE: Good to be with you, Sacha.
PFEIFFER: Good to have you, Ron. Would you remind us, what is the purpose of a debt ceiling? - because it was created by Congress more than a century ago in 1917.
ELVING: The purpose was to placate members of the Senate who were blocking U.S. participation in the Great War, what we now call World War I. There were only a handful of them, but some of them were opposed to the war itself. Others were more worried about the costs of the war and the debt that the U.S. would incur. But as we know, even a very small number of holdouts can paralyze the Senate, and their price, in this case, for their votes, was this artificial limit that was set at several billion dollars, which sounded like an awful lot back then. But it was soon raised and raised again in wartime and in peacetime both. It had to be raised because the federal government regularly spent more than it took in under presidents of both parties - Biden, Trump, Obama, both Bushes, Clinton, Ronald Reagan and so on.
PFEIFFER: So as you've mentioned and as we said, raising the debt was not always a source of political conflict. So why does it seem to be that way now?
ELVING: There's typically been some degree of opposition - speeches, protest votes. It's always been a moment for members to protest the way the government depends on borrowed money. The debt limit isn't about new spending. This is a common misunderstanding. It has to be raised because old debt comes due and has to be paid. Otherwise, the United States would be in default. We have never gone into default. The United States has never defaulted on its obligations, and that would have serious consequences, both predictable and unpredictable.
And as for these threats to simply block the increase entirely, that would take the full faith and credit of the U.S. as a kind of hostage. That's a much more recent feature of the debate. It came with a more recent generation of far more aggressive members of Congress led by figures such as Texas Republican Ted Cruz, and they've used it to leverage policy changes such as trying to defund Obamacare, for example.
PFEIFFER: Ron, a few years ago, during a previous debt ceiling fight, you did a great video explainer that's still on NPR's website. I watched it recently, and it says the debt ceiling is a manufactured crisis. Why call it that?
ELVING: Because Congress created the debt limit, and Congress could eliminate it. It's not part of the Constitution, and not long ago, the Congress routinely raised the limit whenever it adopted a budget. It wasn't even a separate vote. It was just part of the regular fiscal housekeeping. But that was before there was quite so much interest in making it a political showdown and an occasion for, well, call it virtue signaling to some constituents and an opportunity to hold the federal government hostage, for at least a time, in pursuit of other policy or political goals.
PFEIFFER: As we said, this new deal runs into 2023, but since that's after the 2022 midterms, we could see a new power balance in Congress by then. And Republicans are already warning Biden that the next increase may not be so easy. Ron, what do you expect that next debt ceiling battle to look like?
ELVING: If Democrats lose their majorities, President Biden will need at least some Republican votes for a higher limit, just like Obama did and other Democratic presidents who were facing a Republican House or Senate. In the past, they've gotten those votes eventually because at least some Republicans will not want to risk the consequences of default and be blamed for what might come next.
PFEIFFER: Before we let you go, part of the argument for Republicans is that U.S. voters are tired of the spending. And Republicans blame that spending on Democratic policies. The Democrats point out that Republican presidents have contributed to amassing this national debt just as much as Democratic presidents. But based on polling and on your reporting, how much do American voters really care about the national debt?
ELVING: They say they care, and they may hate the debt. But the real question is which government benefits and functions would they personally give up, and how much more money would they be willing to pay in taxes? That's the real trade-off. That's the Congress's tradeoff that it doesn't like to talk about because people don't want to hear it.
PFEIFFER: That's NPR senior editor and political correspondent Ron Elving. Ron, thank you.
ELVING: Thank you, Sacha.
(SOUNDBITE OF JOHN SCOFIELD'S "GREEN TEA")
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