Imagine going to a restaurant, eating a meal, getting the check, and then simply refusing to pay the bill. You wouldn’t do that, because it’s not only wrong, it’s irresponsible, and the restaurant would never have you back again.
Unfortunately, though, that’s essentially what Congress threatens to do every few years now, but instead of a dinner check, it’s our national debt – the bills we already owe as a country – that Congress threatens to just walk away from.
Refusing to pay our national bills beyond the arbitrary ‘ceiling’ set by Congress could create a catastrophe for our economy, cause havoc in our financial markets, and likely result in the loss of trillions of dollars in the household wealth of Americans, according to a 2013 report by the U.S. Department of the Treasury.
But, for some reason, Congress seems to seriously consider ditching the bill every few years.
Later this year, the United States will once again reach our arbitrary debt limit, and Congress will have to act to pay our bills and keep our economy on track. I’m very concerned, though, that we could once again flirt with disaster through partisan brinksmanship and threaten to default on our nation’s obligations.
We cannot let that happen.
Instead, we should work together to spend taxpayer dollars responsibly and address our national debt without coming anywhere close to threatening default.
That’s why I’ve introduced the End the Threat of Default Act, a bill that would get rid of the debt ceiling, eliminate the risk of a potentially disastrous default, and encourage Republicans and Democrats to work together to spend taxpayer dollars more responsibly.
We’ve seen that debt ceiling showdowns in Congress are significantly destructive to our economy. In 2011, the brinksmanship over the debt limit led Standard & Poor's to downgrade the U.S. credit rating for the first time in history, increased the U.S. Treasury’s borrowing costs by as much as $1.7 billion, and brought along “sequestration," one of the worst fiscal policies of the last 30 years.
It’s important to remember that raising or eliminating the debt limit has nothing to do with new federal spending. Our national debt – the money we all collectively owe – is the product of the spending decisions Congress has already made each year to fund our military, operate our schools, maintain roads and bridges, and much more.
We can and should be more responsible and strategic when it comes to new spending, and the impact of each year’s budget on the debt, but that doesn’t change the fact that we have to pay the money we already owe.
If you care, like I do, about our annual deficit and growing national debt, eliminating the debt ceiling just makes sense. By eliminating needless, partisan fights over money we’ve already spent, we could focus our attention on the annual spending process, when Congress decides how much to spend each year and on what to spend it.
This idea isn’t mine alone, either. Economists and policymakers agree that we should repeal the debt ceiling.
In 2013, the University of Chicago’s survey of economists found that 84% agreed that “a separate debt ceiling that has to be increased periodically creates unneeded uncertainty and can potentially lead to worse fiscal outcomes.” Even President Trump has reportedly indicated that he agrees we should get rid of the debt ceiling.
Finally, repealing the debt ceiling isn’t just good for our country; it would also specifically help Delaware.
We are a state that employs thousands of men and women in the financial services sector, which relies heavily on stable, predictable financial markets. Throwing our national and global financial systems into chaos would impact all 50 states, but especially Delaware’s important financial services sector.
The Delawareans I talk with every day are frustrated by much of what’s happening in Washington, and they’re concerned that too often, Congress is doing more harm than good. Dangerous political showdowns over the debt ceiling are a perfect example of politicians doing exactly that.
We need to address our national debt in a sensible, bipartisan way, but gambling with an economic disaster in the name of deficit reduction is not leadership, it’s playing politics with the full faith and credit of the United States.
We can do better than that.