President-elect Donald Trump is demanding as part of the spending package the GOP is trying to force through that the debt ceiling be extended — or possibly abolished altogether, which Democrats have broadly rejected as a ploy to allow new tax breaks for billionaires.
But not so fast, columnist Heather Long wrote for The Washington Post — Trump's proposal is more "enticing" than it appears at first glance, and Democrats would be wise to take it in anticipation of when they eventually return to power.
"He’s right. Democrats would be wise to take the opportunity to push to get rid of it now," wrote Long. "The debt limit is the total amount of money the U.S. government can borrow, similar to a credit card limit, and it was created with all good intentions. Back in World War I, Congress wanted to ensure that the government could easily borrow enough funds to cover war expenses, so it set a high borrowing limit."
In previous decades it was a motivator to cut government spending.
"But in the past two decades, as the national debt has ballooned from $7 trillion in 2004 to $35 trillion, the debt limit has become meaningless," wrote Long.
The problem is, she noted, the debt ceiling doesn't prevent spending, it just retroactively authorizes the spending already passed. Worse, it perpetuates a cycle of the party out of power going through theatrics about spending while doing nothing about it, and, as happened last year, sometimes almost forcing a default that would crash the global economy .
ALSO READ: New Trump foreign affairs pick has history of forging ties with right-wing authoritarians
It makes more sense to just get rid of it and stop repeating the artificial crisis over and over, Long argued.
"Twice now — in 2011 and again in 2023 — House Republicans nearly caused the United States to default on its debt to take a political stand against a Democratic president," she wrote — and just the threat of defaulting had devastating consequences for the economy: "U.S. borrowing costs have risen. Both Standard & Poor’s and Fitch Ratings, citing the debt limit and its related political hostage-taking, have downgraded U.S. debt from the highest — and safest — rating to a slightly lower one. After last year’s debt limit fight, Moody’s said the outlook for U.S. debt is now 'negative.' This is why people as diverse as Wall Street bankers, Sen. Elizabeth Warren (D-Massachusetts), President Barack Obama’s chief economist and a former top aide to then Senate Republican Leader Mitch McConnell (Kentucky) have all endorsed abolishing the debt ceiling."
Trump may not have the best motivations for wanting to eliminate it, Long conceded — but "Trump won’t be in the White House forever."
"Ending the debt limit now would help the country in the long run," she said. "It would take away the worst-case scenario of a default because of congressional inaction. And it would do nothing to disguise the trillions of dollars that Trump added in his first term to the national debt and appears likely to add in his second."
