The debt ceiling debate and discussion as a secondary step outside of the federal budget should be abolished.
Today, the House Budget Committee will mark up, or revise the Chairman’s mark of the Fiscal Year 2013 budget (aka the Ryan budget). This means they will go through and set the high level budget figures for the Fiscal Year 2013 budget, and set targets for the federal budget through 2022. Revenues, taxes, etc. One of the items they will be filling in is the debt limit, or how much borrowing authority will be required to implement THIS budget. The figures can be found on pages 5 and 6 of the
Chairman’s mark (concurrent budget resolution that was adopted on March 22, 2012):
p. 5 bottom (start line 25) [my comment]
DEBT SUBJECT TO LIMIT.—The appropriate
levels of the public debt are as follows:
p 6. top (start with line 1) [my comment]
Fiscal year 2013: $17,072,810,000,000.
Fiscal year 2014: $17,769,762,000,000.
Fiscal year 2015: $18,277,348,000,000.
Fiscal year 2016: $18,752,806,000,000.
Fiscal year 2017: $19,216,661,000,000.
Fiscal year 2018: $19,676,545,000,000.
Fiscal year 2019: $20,168,534,000,000.
Fiscal year 2020: $20,657,588,000,000.
Fiscal year 2021: $21,121,620,000,000.
Fiscal year 2022: $21,627,396,000,000.
The numbers are now blank because the House Budget Committee has to decide these amounts today. The numbers above are what was passed by the House of Representatives on March 22, 2012. Sometime next December, or January, the U.S. government will hit the currently approved debt limit, and there will be a circus discussion in Congress about whether Congress will grant approval for the U.S. Treasury to borrow more money to pay the bills that Congress has told the Treasury to incur. Keep in mind when we do that in the future that the budget resolution being passed out of the House Budget Committee today has already laid out what they say the debt limit will have to be through 2022 to pay the bills for the budget authority they today will vote to grant (many details of how to implement the budget will be carried out by the Ways and Means and Appropriations committees). However, the big picture is set in the budget resolution.
Because the debt limit is denominated in nominal dollars (not indexed for inflation or the size of the economy in any way) we will have to increase the borrowing authority of the U.S. government for a long time to come, even if the Ryan budget became law; later today after they set these figures, I will fill in the blanks above. Success from a fiscal standpoint would mean the debt-to-GDP ratio would decline; even if this happens the debt ceiling will have to be raised. The only way to not raise the debt ceiling is to only have balanced budgets going forward.
The time to debate the debt ceiling is today, not later, after we have already agreed to spend the money.