Things I don't understand about the debt ceiling

[Uncle Joe]

12. Today it's nothing but a political football.

http://en.wikipedia.org/wiki/Debt_ceiling

Prior to 1917, the United States had no debt ceiling. Congress either authorized specific loans or allowed Treasury to issue certain debt instruments and individual debt issues for specific purposes. Sometimes Congress gave Treasury discretion over what type of debt instrument would be issued.[6] The United States first instituted a statutory debt limit with the Second Liberty Bond Act of 1917. This legislation set limits on the aggregate amount of debt that could be accumulated through individual categories of debt (such as bonds and bills). In 1939, Congress instituted the first limit on total accumulated debt over all kinds of instruments.[7]

Prior to the Budget and Impoundment Control Act of 1974, the debt ceiling played an important role since Congress had few opportunities to hold hearings and debates on the budget.[8] James Surowiecki argued that the debt ceiling lost its usefulness after these reforms to the budget process.[9]

In 1979, noting the potential problems of hitting a default, Dick Gephardt imposed the "Gephardt Rule," a parliamentary rule that deemed the debt ceiling raised when a budget was passed. This resolved the contradiction in voting for appropriations but not voting to fund them. The rule stood until it was repealed by Congress in 1995.[10]

The Gephardt Rule allowed for the ceiling to be raised when the budget was passed.

When the Republicans under Newt Gingrich came to power in 1994, they eliminated it which in turn led to the government being shut down with Gingrich threatening to not raise the debt limit as a means to extort President Clinton to accept his draconian budget.

http://www.theatlantic.com/politics/archive/2011/05/how-dick-gephardt-fixed-the-debt-ceiling-problem/238571/

How Dick Gephardt Fixed the Debt-Ceiling Problem

In 1979, this very thought occurred to a young congressman named Richard Gephardt, who proceeded to do something about it. "I had just gotten to Congress," Gephardt explained to me recently. "Tip O'Neill, the legendary speaker, gave me the assignment to pass the debt ceiling [increase]." Back then, the ceiling was below $1 trillion, a fraction of the $14.3 trillion it is today. But Gephardt's job was difficult and lousy nonetheless. "We [Democrats] were in charge of Congress, but nobody ever wanted to vote for it. Republicans wouldn't give us votes, so it was our responsibility. Every time it came up I had to go to every member and seek their vote. It was painful and difficult and, I thought, unnecessary. I'd say to members, 'Did you vote for the appropriations bill? The defense bill? The highway bill?' They'd all say yes. And I'd say, 'Well, then you gotta pay the bill. If you didn't mean it, don't vote for it. Then you wont have to pay for it.'"

Gephardt realized that the easiest way to fix the problem and impose some rationality on the process, was to do away with the second vote. He consulted the parliamentarian. "I asked if there was a way that when we pass the budget [the debt ceiling] can be deemed 'raised' to accommodate the budget people are voting for," Gephardt said. "He said, 'Yeah, we think we can work that out.'"

Thus was born the "Gephardt rule." For a period thereafter, the adoption of the conference report on the budget resolution would trigger the Gephardt rule and "deem to have passed" legislation raising the debt limit to accommodate the spending and revenue levels approved in the budget. Presto! Problem solved.

It didn't last. When Republicans took back the House in 1995, they brought back the second vote as a way to pressure members on spending. "They actually wavered back and forth," Gephardt recalled. "Sometimes they'd use the budget procedure to wave it through, and then other times they'd require the vote. It's silly because it's just grandstanding. David Obey used to call it posing for holy pictures. It's a facade; it's not real. If you're real, you vote for budgetary and spending decisions that would balance the budget. If that's what you want, that's what you should do. That's the operative vote. That's where the money is spent.

More on the link regarding the Gephardt Rule.

Thanks for the thread, fadedrose.