As Democrats push for a 79th increase in the debt ceiling, it’s tempting for Republicans to simply say that enough is enough. Particularly at a time when Democrats are pushing for $3.5 trillion in new spending in the middle of a second consecutive year running a $3 trillion deficit, the need to rein in the size of the federal government rightly is at the forefront of the conservative mind. But rather than simply working to prevent Democrats from successfully raising the debt ceiling, advocates of smaller government should focus on comprehensive reform to put the country on a path to fiscal sustainability.
Despite progressive faith in Modern Monetary Theory to save the day, the national debt is a time bomb that has only started ticking faster as Congress approved extraordinary spending levels to combat the pandemic. If Congress can’t put in place reasonable guardrails on spending now, imagine how it will fare when politically untouchable programs like Social Security and Medicare explode in cost.
The CBO’s 30-year budget projection shows the country on the path to a debt-to-GDP ratio of over 200 percent, an unmanageable level. By that point, simply paying the interest on the national debt will become more expensive than all discretionary spending, including national defense, and Social Security combined. At the same time, an aging population with fewer young people will make the current setup of Social Security and Medicare unsustainable.
So in that sense, conservatives are right not to acquiesce to Democrats’ head-in-the-sand attitude. But at the same time, Republicans can do some real good by demanding serious reforms that can work to bring spending in line with the country’s means.
One obvious fix is unfortunately needed because of the past actions of Republicans. Under the Obama administration, Republicans succeeded in passing the Budget Control Act (BCA), which would have saved taxpayers over $1.9 trillion, or $16,000 per household, had it been allowed to survive through this year.
Instead, they worked with Democrats to chip away at the law on several occasions. Most egregiously, in 2018, Republicans passed a budget deal that essentially eliminated the caps put in place by the BCA. It was a serious unforced error, but reestablishing similar caps on spending would be a way to make amends to taxpayers.
Another element to package with any attempt to raise the debt ceiling is a vote in Congress on a balanced budget amendment to the Constitution. Legislators should have to go on record on fiscal responsibility, and those legislators opposed should have to explain to taxpayers why they are willing to put future generations on the hook for today’s overspending.
Of course, spending reform must be bipartisan as well. A bipartisan debt-reduction commission to identify areas of agreement on debt and deficit reduction (much like the National Taxpayers Union Foundation and the U.S. Public Interest Group recently did) is a common-sense step towards identifying and hopefully eliminating excessive spending.
Other bipartisan reform ideas include the 2019 Bipartisan Congressional Budget Reform Act introduced by Senators Mike Enzi (R-WY) and Sheldon Whitehouse (D-RI). This legislation would end the cycle of debt-limit brinksmanship while requiring adherence to a debt-to-GDP target, as well as streamlining deficit reduction changes.
One final area of bipartisan agreement is on legislation that would automatically set up a continuing resolution if funding is not passed in time. One such bill, co-authored by Senators James Lankford (R-OK) and Maggie Hassan (D-NH), would end the process of costly government shutdowns, instead requiring legislators to stay in town until a funding bill is passed.
These changes would not solve the country’s current debt issues, let alone the ones coming down the road. But they would offer a pathway to reforms that would better situate Congress to deal with the national debt than further government shutdowns or unproductive slap fights over the debt limit.