All across Western Europe—the land of platinum-plated social benefits, the 35-hour work week, tony retirement plans and government-funded health care—countries are coming to the realization that they can no longer afford these luxuries amid skyrocketing deficits. Yet here in the United States, as we face a $14.3 trillion deficit, some are calling for increasing our government’s ability to borrow even more money without any concern for spending reform. Congress can’t allow that to happen, lest we become the Europe of the West.
The U.S. government is fast approaching its $14.294 trillion debt ceiling — the statutory limit on how much money it can borrow to finance spending. Just how big is that? To put it in perspective, it would take essentially everything that Americans produced in all of last year to pay off the existing national debt. That comes out to $45,000 of debt for each American.
Unfortunately, it’s all too common for Congress to reach that ceiling and keep raising its own credit limit, letting itself borrow and spend even more. In fact, Congress raised the debt ceiling from $6.4 trillion in 2002 and nine times thereafter to its present levels. Hopefully, though, this time will be different.
Yesterday on “Face the Nation,” Senator Mark Kirk (R-IL) said, “I will vote ‘no’ on raising the debt ceiling unless we have comprehensive, dramatic, effective, and broad-based cuts to federal spending including the reform of entitlement spending.” Sen. Kirk’s instincts are right. The solution starts with Congress. David Addington, Vice President for Domestic and Economic Policy at The Heritage Foundation, writes:
Federal spending has been out of control for decades, and federal borrowing has therefore also been out of control for decades. America has amassed a giant, unaffordable debt and a giant, intrusive government. This did not happen by accident. Congress passed all the laws that made it happen. Fortunately, Congress has under the Constitution all the power it needs to solve the problem it created. It needs only the will to do so and the support of the American people.
Here’s how Congress should use that power. As Addington writes, Congress should not increase the debt limit until it puts the government firmly on the path to financial responsibility. And it can get there by cutting current spending, restricting future spending, and putting a more effective federal budgeting process in place.
The Heritage Foundation identified $343 billion of potential spending cuts that could be made on top of the cuts passed by the House in February and the repeal of Obamacare appropriations, which the House approved in January. When it comes to future limits on spending, Congress can impose enforceable caps on out-of-control entitlement programs and pass a balanced budget amendment. The budgeting process should be reformed, too, by making it more transparent and imposing new limits on federal agencies. Merely raising the limit without reforms is the worst option, Addington says:
[T]he least acceptable outcome is for Congress to continue to raise the debt ceiling over and over, doing nothing to drive down federal spending and borrowing, and to pile trillions of dollars in debt upon the shoulders of America’s children and the generations to follow.
President Barack Obama and White House officials have warned of global economic Armageddon if Congress does not act now to raise the debt limit. Their warnings, though, are reckless hyperbole. A greater threat is the U.S. government’s unchecked expansion of unsustainable deficit spending. Congress must break its pattern of borrowing more and spending more by acting now to cut spending and get the government’s fiscal house in order. Only then can it avert a real crisis.