43 Democrats Want to Abolish the Debt Ceiling

Rep. Bill Foster (D-Ill.) speaks on Capitol Hill in Washington on Oct. 2, 2020. J. Scott Applewhite-Pool/Getty Images

The U.S. debt ceiling is a relic from another time that serves no useful purpose and should be abolished, according to 43 House Democrats, an opinion shared by some leading economists.

The effort to abolish the ceiling is led by Rep. Bill Foster (D-Ill.), who introduced H.R. 415, the End the Threat of Default Act, which would repeal the debt ceiling to prevent it from being used to wield political leverage.

“Weaponizing the debt ceiling and using it as a pawn in partisan budget negotiations is dangerous and repeatedly brings our nation to the brink of default, which would be disastrous to the U.S. economy,” Foster said in a January statement introducing the legislation.

The bill is co-sponsored by 42 other members of Congress, all Democrats.

Foster introduced the bill on Jan. 20, one day after the current statutory debt limit of $31.4 trillion was reached, sparking the current debt crisis. The danger of default was temporarily averted when the Treasury enacted “extraordinary measures” to keep from exceeding the limit.

House Speaker Kevin McCarthy (R-Calif.) refused to raise the limit without some agreement by Democrats to limit future spending.

President Joe Biden refused to negotiate over raising the debt ceiling, saying a refusal to raise the limit puts the full faith and credit of the nation at risk.

Democrats insist there is no choice but to raise the debt ceiling, since borrowing is needed to fund spending decisions already enacted by Congress and therefore required by law.

Republicans have insisted that addressing the debt ceiling provides a needed opportunity to discuss federal spending.

A ‘Sham’

The debt ceiling itself is a “sham,” according to Rep. Jim Himes (D-Conn.), who argued for repeal in an interview with NTD, sister media outlet to The Epoch Times, on April 20.

“It was designed many, many years ago to control the debt of the United States. It has failed spectacularly,” Himes said. “It serves purely as a mechanism to threaten the economy of the United States.”

Debt ceiling crises occur only when the Republicans control Congress, according to Himes, because they are willing to hold the economy hostage to their fiscal demands.

“And so the only responsible thing to do is to get rid of this fiction—that is very, very dangerous—that the debt ceiling somehow controls the debt,” Himes said.

Past Versus Future Spending

The debt ceiling doesn’t prevent the government from spending money but rather enables the government to pay obligations already incurred. Given that the government has operated on a deficit budget for more than 20 years, borrowing is always required to do that.

Of total federal spending in fiscal 2022, just 27 percent went for discretionary items. The remainder had been authorized by previous congresses for so-called entitlement programs such as Medicare and Social Security, plus interest on the national debt.

Rep. Jim Himes (D-Conn.) speaks with a reporter on Capitol Hill on April 20, 2023. Courtesy NTD

Nondiscretionary spending totaled $4.6 trillion that year, against tax receipts of $4.9 trillion. To pay for the $1.7 trillion in discretionary spending authorized by Congress, the government had to borrow about $1.4 trillion.

Critics of the debt ceiling say that the time to evaluate the national debt is when passing appropriations laws, not when it’s time to pay the bills.

“Threatening to default on our debt is the same as ordering an expensive meal at a restaurant, eating it, and skipping out without paying. We can and should have a real conversation about overall spending, but the full faith and credit of the United States must never be compromised,” Foster wrote.

At least one leading economist agrees with the idea of eliminating the debt ceiling.

“I wish they would talk about doing away with this thing because I think it does so much damage,” Robert Kravchuk, a National Academy of Public Administration Fellow, told The Epoch Times, referring to the uncertainty it creates in the economy.

Opportunity to Talk

Republicans disagree, saying debt limit talks are helpful because they force legislators and the public to reexamine spending habits in the context of creating the federal budget.

“If you gave your child a credit card, and they kept maxing it out to the limit, would you just blindly raise the limit? Of course not,” McCarthy said in a speech at the New York Stock Exchange on April 17.

“You would sit down and work with them to figure out how they could change their spending habits so it never happens again. That exact same thing is true for our national debt. Debt limit negotiations are an opportunity to examine our nation’s finances.”

Republicans announced their proposal, the Limit, Save, Grow Act of 2023, on April 19. The measure would lift the nation’s debt ceiling by $1.5 trillion or until March 31, 2024, whichever comes first.

It would also return discretionary spending to 2022 levels, limit spending growth to 1 percent per year, take back unspent COVID-19 relief funds, repeal certain tax credits, reinstate work requirements for many people on public assistance, and remove barriers to increased production of domestic energy.

It’s unclear whether they will be able to gain the required 218 votes for passage in the narrowly divided Congress.