What is the Debt Ceiling?
Over the next month, one topic will dominate the news coming out of Washington. The debate about if and how to raise the debt ceiling will hit a fever pitch as the government runs up against a deadline.
In 1917, Congress capped the amount the government can legally borrow at $11.5 billion. The debt ceiling limit is a lot like your credit card limit. You can borrow only as much as your credit card limit allows and no more. The idea was to help control spending.
It has not worked. Instead, since 1962, the debt ceiling has been raised 74 times. It has been raised by Republicans and Democrats alike. The result is that we are now $14.2 trillion in debt.
If the debt ceiling is not raised, the Treasury Department would not be able to borrow the difference between what we spend and the money we have. In other words, we would not have enough money to pay all of our bills. That would result in a first-ever default on our obligations as a country.
I believe that we need to address not just the debt ceiling, but also its cause – overspending. We do not have a revenue problem, we have a spending problem. In 1996, the federal budget proposed spending $1.6 trillion. President Obama's 2012 budget proposes to spend $3.7 trillion.
We should not increase the debt limit without taking real and concrete steps to stop the chronic overspending. Its time for Washington to make tough decisions.
Sincerely,
