The GOP’s short-term debt-ceiling hike: A good first step that’s already working

Article 1 of the US Constitution gives Congress the exclusive authority to borrow money to fund the government. Up until World War I, Congress would approve every bond issuance. The borrowing demands of the war made this impractical, so Congress authorized a “debt ceiling,” where the government could freely borrow up to a statutory limit and then go back to Congress to approve additional borrowing. Think of it as giving your teenager a pre-paid debit card.

With this measure, the government had more flexibility to manage its affairs while preserving the Constitutional principle that Congress controlled the purse strings.

“Suspending” the debt ceiling until May upends this principle. Upon enactment, the government’s borrowing authority would be unlimited until May. Presumably, the government could borrow trillions in this window, providing either the markets or the Fed would meet the new supply of debt.

Worse, however, is that the GOP move establishes a very slippery precedent. The left has been agitating to simply eliminate the idea of a debt ceiling entirely. For all its flaws, the ceiling at least guarantees we will have some debate about government spending. The left finds this annoying. Unfortunately, the GOP plan to “suspend” the ceiling provides at least partial support to this argument. If we can “suspend” it for three months, why not a year? Once you’ve surrendered the constitutional principle behind the ceiling where and how can you draw a line?

Despite their past history of punting on difficult fiscal issues, I was willing to give the House GOP a skeptical benefit of the doubt on their plan for a short-term lift in the ceiling. The deficit debate has three components, ie. debt ceiling, sequestration, and budget expiration, which happen close to each other, but not simultaneously. It made some strategic sense to weave them together into a single debate.

I assumed, however, that this would entail an increase in the debt ceiling of a few hundred billion dollars, to provide the time to negotiate a longer-term deal. I did not anticipate it would feature the House GOP surrendering its constitutional obligations.