That budget/debt limit deal
Am reading the small print of the budget/debt limit deal that has every Washington D. C. faction grumbling. The one that lets the feds keep borrowing, blows through the “sequester” to spend another $80 billion , and modestly tightens the SS disability program. Nobody is in love with this thing. It may pass simply because it’s the least worse alternative.
But there’s something in this deal that hasn’t gotten much attention. It doesn’t “raise the debt limit”. It SUSPENDS the debt limit.
What’s the big deal, you ask? Raise the debt limit. Suspend. Who cares? Well, you ought to care, It’s could signal a big change in the constitutional balance of power. Whatever your political persuasion, you might want to ponder a few things.
Consider history. Congress’ possesses two “powers of the purse”. One is the spending power. The feds can’t spend unless Congress appropriates the money. The other is the borrowing power. Only Congress can contract debt by pledging the full faith and credit of the United States. During the first 128 years of the Republic, Congress took this responsibility quite seriously. They voted separately on every new debt issue. It wasn’t until the flood of new borrowings in World War I (second Liberty Bond Act) that Congress got tired of voting new debt seemingly week after week. They delegated the borrowing power to the Treasury, but only up at a certain, specified amount. That’s what we call the “debt limit”. Congress retained at least a nominal fig leaf of control.
Congress still is delegating the borrowing power to the Treasury, but with a debt limit suspension there is no longer even a pretext of Congress retaining a vestige of control. Basically they’ve ceded half of the power of the purse to the Executive. The message is “go ahead and borrow whatever.”
Now, I can think of two arguments why this isn’t such a big deal. One is that the suspension is temporary and lapses in early 2017. That’s true, but reimposing any limit will be a tough slog. The federal government borrows so much that reimposing a limit in 2017 will require a huge boost from the old limit (several trillion dollars at least). The symbolism may be too much to swallow. A second reason (with which I have some sympathy) is the practical irrelevance of any debt limit. Once Congress votes a certain spending level and fails to fund it with equal revenues, borrowing follows as a matter of course. Unless we contemplate not paying some of our bills, and no one (yet) has advocated this course. Notice that our debt fights are different from those of a distant yesteryear. Typically up to WWII debts were used to finance prospective spending. In other words, the proposition from the Executive was “If you let us borrow this much, here is what we will spend it on” (war, for example). For some decades now, the pitch has been different. It’s “Hey, Guys, we’re already spent the money you told us to spend, now give us the wherewithal to pay the bills”. Congress has a tough time winning that fight.
Still, the debt limit suspension signals abject formal surrender of one of Congress’ main weapons in its eternal tug-of-war with the Executive. Baron Montesquieu must be turning in his grave and having a whole litter of kittens.