You can understand why President Obama and congressional leaders on both sides of the aisle sought to cast their end-of-October budget deal in the best possible light. They avoided a potentially catastrophic national default. They reduced the possibility of a government shutdown. And they raised the debt ceiling until March 2017, taking that bargaining chip off the table until the next president is in the White House.
For a last-minute, secret backroom deal, that’s not too shabby. It was bipartisan and took modest steps in the direction of political stability and fiscal responsibility. And it was vastly preferable to the alternative, which would likely have produced a government shutdown, the possibility of a default on the national debt, and certain fiscal chaos.
That’s the good news. The bad news is that for all their hard work, our political leaders indulged in two bad habits that they really need to kick, because they wreak havoc with effective and efficient government and cost taxpayers a pile of money.
First, while they gave themselves some breathing room before the next time the debt ceiling has to be raised, they will nonetheless have to raise the debt ceiling eventually. They should have abolished it, or at least suspended it.
The debt limit was instituted during World War I, when Congress handed over to the Treasury the ability to sell bonds to fund government needs without getting permission every time. In essence, the debt ceiling was a way to keep tabs on the Treasury, while still allowing the government to pay its bills for spending that had already been approved.
