>The Debt Ceiling: Just the Facts
Garrett discusses the ongoing debate to
raise the debt ceiling on CNN.
Each year, Congress is tasked with the job of establishing a budgetary framework to dictate how the federal government will spend its money. When the decision is made to spend more than the amount we take in, we have to finance the excess spending by accruing debt that must later be paid off.
Over the course of history, borrowing by the federal government has been a common practice. Many presidential administrations have run deficits and many have added substantially to the national debt. Additionally, many Congresses have raised the debt ceiling before. In fact, since 1962, Congress has voted 74 separate times to raise the debt ceiling.
Given our country’s penchant for taking on more debt, one has to wonder why it is so difficult to do it again this time. Why all the sudden is Congress so opposed to extending the borrowing limit when they’ve done it so many times before? The answer becomes much clearer when we consider a few facts.
In 1980, the national debt represented just over 40% of the nation’s entire economy. Today, this figure has grown to represent 100% of the nation’s gross domestic product (GDP) and our debt is projected to double the size of our economy by 2035. Since 1960, total government spending at all levels has risen from 27% to 37% of GDP and is set to reach 50% by 2038 under the current projections.
Our nation’s entitlement programs are becoming so large – and will consume such a significant portion of our finances – that it will be impossible for us to fund other areas of our government without borrowing substantially from the rest of the world at very high interest rates.
As you can see, while past administrations and Congresses have had the luxury of extending the borrowing limit with relatively little consequences to the overall economy, I think we can all agree that we’ve reached a moment of reckoning. If we do nothing, if we choose to put off the tough decision for another day, we are at risk of becoming the next Greece.
So the question remains: How do we move forward?
There are many competing proposals that are floating around that can become complicated and confusing for everyone following at home. The approach that I and many House and Senate Republicans have put forth would cut government spending by $111 billion next year and place enforceable caps on discretionary spending levels going forward. And to avoid this issue in the future, it would require Congress to pass a balanced budget amendment to the Constitution in exchange for raising the debt ceiling to the level requested by the president. This plan would seek to tackle the deficit through spending restraints, not tax increases.
The competing proposals are very different in nature, but ultimately have the same end goal in mind, which is to restore the prosperity of our great nation. I respect my colleagues across the aisle and understand their motivations for supporting the approach they’ve endorsed. These are certainly tough choices that will affect many Americans and will make unfortunate cuts to some popular programs.
As Vice Chairman of the House Budget Committee, I can assure you that these cuts are not being made as a function of protecting “special interests” or targeting helpless victims. Instead, these are being made in response to a 50-year trend of fiscal irresponsibility and excess spending that forced us to this point. This is exactly the kind of discipline and honesty we need right now in Washington to avoid even harsher predicaments in the future.
