Biden Doesn't Need Congress to Avoid a Debt-Ceiling Crisis - Blinder WSJ [View all]

[question everything]

(Mr. Blinder, a professor of economics and public affairs at Princeton, served as vice chairman of the Federal Reserve, 1994-96.

I admit, I did not follow it, but perhaps others will find this of interest)

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The national debt ceiling is a numerical limit, set by law, on total U.S. government borrowing. Prior to a 1917 act of Congress, the Treasury needed congressional approval for every new issue of debt. World War I made that cumbersome, to say the least, so Congress switched to an overall limit on total borrowing—which has been raised numerous times since then.

If the budget enacted each year implies more borrowing than the limit allows, Congress typically raises the limit without much fuss. It’s routine because the federal budget is usually in deficit, requiring the Treasury to borrow more each year. If the debt ceiling prohibits the Treasury from borrowing enough, the government would have to renege on some commitments—with unknowable but likely horrible consequences, such as a financial crisis and a recession.

(snip)

We lived through debt-ceiling crises in 1995-96, 2011 and 2013. In each case, congressional Republicans used the threat of default to try to bend a Democratic president to their will. In each case, default was avoided at the last moment, averting catastrophe. Today, House Republicans are again using the threat of default to get President Biden to accept budget cuts that he doesn’t want—and that they haven’t named. The problem isn’t economic. The U.S. government has the wherewithal to pay all its bills in full and on time. It’s purely political. The issue is whether rank partisanship will force the U.S. into default.

(snip)

The 14th Amendment to the Constitution states that “the validity of the public debt of the United States . . . shall not be questioned.” If reneging on the public debt is unconstitutional, does that mean that other legitimate claimants—such as federal contractors or Social Security recipients—must be stiffed? Defaulting on any obligation of the U.S. government is reckless, and defaulting on the national debt is unconstitutional. That should end the debate.

https://archive.is/DRTR2