Despite Democrats’ insistence that negotiation and bargaining have no place in a conversation about raising the debt ceiling, budget reform has, historically, been tied to debt limit legislation. In fact, all eight major deficit-reduction laws since 1985 were tied to debt limit legislation.
Congressional Democrats the Biden Administration have gone on a media tour calling the GOP “irresponsible” for *checks notes* trying to rein in our out-of-control national debt:
- Treasury Secretary Janet Yellen said, “This is something you can’t negotiate over or bargain about,” describing coupling spending restraints with a debt ceiling increase as a “very irresponsible thing to do.”
- White House spokesperson Karine Jean-Pierre told reporters that the White House will not negotiate with lawmakers: “Like the president has said many times, raising the debt ceiling is not a negotiation; it is an obligation of this country and its leaders to avoid economic chaos… Congress has always done it, and the president expects them to do their duty once again. That is not negotiable.”
- Senator Schumer said, “We cannot let the extreme views of a few who want to play chicken with the debt ceiling and recklessly risk driving the American economy off the cliff… if these irresponsible extremists fail to allow America to pay its bills and default, Upstate New Yorkers could see real dollars from so much of what they own disappear from their monthly Social Security checks, their retirement savings, their home value.”
Of course, not a single Republican has called for letting the U.S. default on its debt. Rather, they see the debt ceiling hike as an opportunity to deliver real constraints on future spending.
This, as previously mentioned, is the precedent.
Since 1985, there have been eight major deficit-reduction laws that have, collectively, reduced spending by trillions of dollars. All of these bills were tied to a debt ceiling hike.
The Committee for a Responsible Budget lists out examples of how the debt ceiling has been used in the past:
- The Gramm-Rudman-Hollings Act of 1985 raised the debt limit but contained across-the-board cuts and set a target to have a balanced budget by 1991.
- The Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987 attached a deficit reduction measure to the increased debt limit, requiring automatic sequester if deficits did not meet annual targets.
- The Omnibus Budget Reconciliation Act of 1990 raised the debt limit by $915 billion but also contained nearly $500 billion in deficit reduction over the next five years. It also created enforcement procedures in the Budget Enforcement Act (BEA), which helped lead to budget surpluses in the late 1990s.
- The Omnibus Budget Reconciliation Act of 1993 raised the debt limit by $600 billion but contained nearly $500 billion in deficit reduction over five years. The agreement also extended the original spending caps from 1990.
- The Line Item Veto Act of 1996 gave the President authority to veto specific provisions in legislation that increased the federal deficit. This practice was later ruled unconstitutional by the Supreme Court.
- The Balanced Budget Act of 1997 included a $450 billion debt limit increase and called for about $125 billion of net deficit reduction over five years and $425 billion over ten years.
- The Statutory PAYGO Act of 2010 contained a debt limit increase of $1.9 trillion. The bill also included budget process reform that reinstituted statutory PAYGO procedures that require tax cuts and mandatory spending increases to be fully offset.
- The Budget Control Act of 2011 gave the President the authority to increase the debt limit by $2.1 trillion. It also contained $917 billion in deficit reduction over ten years, primarily through caps on discretionary spending. In addition, the bill established the Joint Committee on Deficit Reduction to produce deficit reduction legislation of at least $1.2 trillion in savings.
Like they have done in the past, it is imperative that lawmakers take this opportunity to rein in Washington’s out-of-control spending.