What's the point of the (US budget) debt ceiling?

They could do this. In fact, in 1979 they did pass the Gephardt rule that essentially states “when we authorize spending, it’s an implicit authorization to raise the debt ceiling if necessary, because we’re not idiots who would tank all US public debt because of a procedural formality.”

Then Republicans repealed that rule in 1995 so that they could use it as a political weapon. Most Republican voters hate debt in all forms, and they have zero understanding of what the debt ceiling represents. It helps them poison-pill any legislation Democrats might pass when they’re in control, whether it’s spending-related or not, whether it’s revenue-neutral or not. It’s not like the filibuster where both parties take advantage of it; it’s really just a thing Republicans do.

That’s why this Kabuki drama of pretending to take a dramatic stand against debt plays so well with the Republican base. They love the spectacle of Republicans threatening to shoot the hostage to enforce minority rule when they’re the minority. People aren’t bullshitting you when they’re telling you that its only de facto purpose is to serve as a lever of power for Republicans. Democrats would love to reinstate the Gephardt rule to avoid all this silliness, Republicans will do everything they can to keep the silliness, because their agenda depends heavily on it.

Don’t forget that a big part of the budget is debt service, and that is always accumulating.

Right, the Constitution says that Congress must authorize debt, but even the Constitution can’t change the laws of mathematics. If Congress passes a spending bill, and there isn’t revenue to cover it, then we must go into debt, and therefore the passing of that spending bill must be construed as authorizing that debt.

The money isn’t spent when the legislation is written, the money is allocated to be spent at the time.

Let’s say you own a house with a whole lot of value, many many millions, and the bank will let you borrow against that house more or less indefinitely.

You and your wife agree to only borrow $100,000 against the equity in your home. You have income, so you aren’t just spending everything by borrowing.

You buy some things, and get up close to your debt limit. Then you buy a car with a car payment. If you pay that car payment, you will go over your debt limit.

So, you discuss with your wife whether you should raise your debt limit, something that you have only imposed on yourself, not something imposed by external entities, or should you have your car repossessed and take a substantial hit to your credit rating.

You can have a separate discussion as to whether you should have bought those things, or whether you should have entered into those financial obligations. You can have a discussion as to whether you should pick up more hours at work to help to pay against the debt. But at this point, the only question facing you is whether you honor the financial obligations you have made or default on them.

I guess I’m still not getting it and will continue your analogy. If I buy a car and finance it, I then know when I make the purchase that I am exceeding my “debt limit.” I would think the very act of buying a car when I am up against my “debt limit” is implicit, possibly explicit authorization to exceed my self imposed debt limit.

Likewise, Congress projects (numbers made up) that taxes will take in $1 trillion in money next year. It has authorized $2 trillion in spending. Unless we interpret those spending bills as conditional, i.e. only spend this money if we have it (which is not something anyone is seriously arguing) then the very act of authorizing $2 trillion in spending when you only take in $1 trillion, at least IMHO, should clearly be seen as authorizing the additional debt.

I’m not sure how to view it otherwise. Stated differently: my wife sends me to Best Buy and tells me to buy a 70" TV for $500. I’m on the way to Best Buy and see that we have $211.73 in the bank. There are two competing, and reasonable things to do here. I could turn around and go home believing that my wife was in error and thought we had enough money to buy the TV. Or, I could buy the TV, put it on a credit card, thereby increasing our family “debt limit.” Either one of those things are reasonable.

What is not reasonable (which I think is analogous to the current situation) is to say that my wife has both told me to buy the TV no matter what and further not to go into debt. What she is asking is an impossibility. It must be either don’t buy the TV, or buy the TV and raise the family debt limit. Nothing else is possible.

The problem may be that you are changing the analogy from one where you are going out to spend money that you don’t have, vs, committing to money that you may not have at the time.

You aren’t going out to buy a TV and finding yourself short, you are coming against commitments that you have made and finding yourself short. You are not buying something that puts you over the debt limit, someone is presenting you a bill for services rendered or debts owed that paying will put you over the debt limit.

Like I said, maybe you should have a conversation about how, if you want to stay under this self imposed debt limit, you need to watch your spending and commitments, or that you should tie a spending commitment to an increase in the debt limit to cover it, but that’s not a relevant conversation at this time. What is relevant is whether you want to agree to raise this self imposed debt limit or default on your debts.

I’d also point out that it’s not all about luxuries like big screen TV’s. It’s things like your roof leaking, which if not fixed, could ruin your house. You’ve called the contractor out, paid them half up front, and after they get done, they present you with the bill for the other half which would put you over your self imposed debt ceiling if you paid. You can either increase your debt ceiling, you you can default on that debt, destroying your credit rating.

Are either of you actually confused about what the U.S. debt ceiling is? If not I question the need for analogies that IMO just make the issue more convoluted. The U.S. debt ceiling is a statutory grant to the executive branch to issue debt however the Sec Treas sees fit, up to X amount. Since basically all congressional budgets/continuing resolutions/spending mandates etc since 2001 or so have budgeted to specifically have the government operate in the red, it is possible that that operational “red” could result in a situation where to fund the spending mandates, the Sec Treas has to issue new debt she isn’t allowed to issue because she has run out of the statutory grant of debt issuance approval, thus it’s a natural contradiction in our system of government–if Congress chooses to budget deficit spending but chooses to not also increase statutory debt issuance authority sufficient to cover the deficit spending, a crisis occurs.

Analogies are useful when they take a complicated matter and convert it into a form that people more easily understand. There should be a philosophical “Rule” however, that analogies should not be used to understand national finance and debt issues, because it is basically almost universal that people implode their analogies into absurdity by trying to compare the way governments manage spending, budgeting, debt issuance and monetary policy to the way a household operates. There actually isn’t a great analogy between how household finances operate and national finances, because they are intrinsically just fundamentally different things.

Is this some sort of odd accounting gimmick? Because you incur debt when you make the commitment, not when you pay the bill. That’s really the definition of incurring debt. In the TV analogy, would you say that I was not incurring debt until the credit card company asked for a minimum payment? Because that is not how anyone views debt…ever.

I agree that the government is different in many ways, but the definition of the term “debt” does not change from entity to entity. As much as people overuse analogies of government finances to household finances, I believe that the reverse is starting to happen such that people believe that no restraints of government are needed at all because it is just different than regular people, which is also not correct.

Yes but the idea that we’re taking on too much debt has no practical association with the statutory debt ceiling. The statutory debt ceiling has existed since WWI and despite a few hiccups, Congress has never failed to raise it when necessary to cover budgeted deficits. The growth of debt is a function of budgeted deficits, not the debt ceiling law.

I don’t disagree. My only point is that if you budget a deficit, then you have implicitly, if not explicitly, permitted an increase in debt. How can Congress claim that they have not authorized the increase?

I’m guessing that theoretically if authorized spending goes above the ceiling then it does not automatically raise the ceiling since Congress has until the end of the session to increase revenue to stay below the ceiling. In actuality …

I could see that argument if the spending was viewed as conditional. “The military may buy 100 M-1 Abrams Tanks, but ONLY IF there is enough money in the treasury.” However, nobody views Congress’ spending directives as conditioned on that. So, if they are saying spend no matter what, and then they don’t raise revenue to cover it, then the only choice is to accrue debt. IMHO, they already made that decision.

OR if we presume that Congress (both Dems and Pubs) are responsible enough to balance revenue and spending on their own. :rofl:

Because we’re a country of laws, since there is no implicit grant of authority in the Constitution for the executive to issue debt, the only such grant that can exist is statutory, which previously was done with individual debt series each being approved by Congress (which still goes on for special bond programs like the Build America Bonds), but has regularly been done utilizing a “debt ceiling” law since WWI.

It is in the power of the Congress to set the budget. It is in the power of the Congress to determine if we issue debt. There is no constitutional principle that just says “well Congress cannot use two of its powers in a way that is contradictory”, but they actually can. Now, we live in a country where there is some level of informal rules that govern the relationship between the three branches. One could argue the President would be justified in taking some sort of unprecedented action if Congress leaves him in such a bind, but exactly what, and how, is hard to say and it could easily cause a serious constitutional crisis.

Right. And I am talking about how to interpret a statute. If the statute says “spend $1 million” and we interpret that to mean “spend $1 million, regardless of whether we have that money in the treasury” then that is authorization for more debt, if needed.

It may not be a constitutional principle, but it is a principle of every human interaction. You don’t structure things to allow for contradictions. A traffic cop can have the power to tell me to go left; he can have the power to tell me to go right. But he can’t have the power to tell me to do both because it is an impossibility.

My interpretation gets rid of the 14th Amendment debt problem as well without any messy court intervention.

In the case of Congress they do such things. They commonly legislate separately authorizations conditional on appropriation (telling a department they MAY spend up to $X millions on program ABC this fiscal year subject to appropriation) and appropriations (telling the Treasury to put $X million in the ABC program account this year). A project can sit “authorized” for years until there’s an appropriation.

And as mentioned earlier, it apparently only became a “problem” because the raising of the debt limit became a stand-alone act that can be voted on distinctly from the budgeting and appropriating, thus making it possible to use for horsetrading and grandstanding.

The Congress itself has determined that their reading of the Constitution means they cannot, will not, must not give the Executive an implicit between-the-lines “common sense”-based authority to issue debt as he sees fit.

In theory it has always been a potential problem. The budgeting and debt issuing process have always been procedurally separate and rely on different powers that congress has. Prior to the establishment of the debt ceiling they would not ordinarily finalize a budget without providing for new debt issuance to cover any needed deficit spending, but in theory even 200 years ago they could’ve gotten in this same bind by budgeting money we don’t have to spend but not allowing the treasury to issue new debt.

At this point, it should be a parliamentary process that a spending bill that puts the US over the debt ceiling cannot be passed unless it either raises the ceiling itself or increases revenue to pay for it.

We’ve been drawing analogies and I’m thinking the best analogy is that boss that waits until the last second to a deadline then we need to act right fucking now because the deadline is here. Don’t question it. Don’t think about it. Just do it even if it is the wrong thing to do because we have no time left.

A problem is that a lot of federal spending is on auto-pilot and doesn’t need to be appropriated. Social Security, Medicare, Medicaid, food stamps and other entitlement programs are direct spending that is automatically paid out to beneficiaries. Spending on these programs increases every year without any bill being passed. And such mandatory spending represents a majority of federal outlays.

With the other two being the military and debt service. I can’t imagine the Republicans voting to either cut military spending or raise taxes to cover military spending.

Entitlements, military spending, and debt service make up the vast majority of spending, and only military spending is even negotiable.