The following editorial originally appeared in The Baltimore Sun:
All the back and forth between Democrats and Republicans over raising the federal debt limit — as the Oct. 18 default date loomed — has been exhausting. Though lawmakers struck a short-term deal Thursday, avoiding a government shutdown, the bickering is likely to start up again two months down the road, as the new December deadline approaches.
If left unresolved then, it’s going to extract a terrible financial toll on the nation, not just because of potential delays in much-needed benefits from Social Security and Medicaid and in payments to states for basic services from schools to roads, but because it’s going to shortchange bondholders — and their wrath will have consequences. Just the brinksmanship that’s been played so far may well prove costly in higher interest rates on downgraded U.S. debt for years to come.
The world expects the United States to pay its bills and if it doesn’t (or even acts like it won’t), there are global repercussions.
The most ridiculous part about such standoffs is that there is nothing gained from it. That’s because the debt limit has nothing to do with future spending. Let’s underscore that point: This isn’t about how or how much the federal government spends from now on, this is about paying bills that are already due.
It’s akin to already having a $28 trillion balance on your credit card. The bank expects you to eventually pay it off and instead of keeping that commitment and at least paying the interest, you toss the bill in the trash. Your debt doesn’t cease to exist. The money is still owed.
Denial isn’t a sound strategy, only a costly one. You think members of Congress don’t know this? Of course, they do. And yet here we are because some think they’ll be rewarded by their supporters for showing faux toughness.
Filibustering a bill to raise the debt limit? That’s just insanity, but that’s exactly what Senate Republicans are willing to do. If Democrats have to go it alone to raise the debt limit, they absolutely should. Someone has to act responsibly.
We don’t often find ourselves in complete agreement with both JPMorgan Chase Chief Executive Jamie Dimon and U.S. Treasury Secretary Janet Yellen, but they are correct in their views expressed separately last week that the whole debt ceiling concept needs to be put aside.
These periodic standoffs are just partisan politics and a particularly costly form of it. Congress can’t be trusted to raise the debt ceiling so let’s get rid of it entirely or at least make increases automatic whenever a spending bill is approved.
If Americans oppose new spending or new tax policies, they can always kick their elected officials out of office. That’s the real check and balance on budgetary decisions. Sticking with that kind of fiscal and political discipline will surely result in fewer self-inflicted economic crises coming out of Capitol Hill.
