Stop crying wolf about the debt ceiling and resolve it once and for all

As the immediate former U.S. comptroller general and a former public trustee of Social Security and Medicare, I have been in the fight for fiscal responsibility for 30 years. During that time, the debt ceiling has been raised 27 times, most recently by $2.5 trillion in December. 

Despite being criticized by some, Senate Minority Leader Mitch McConnell’s (R-Ky.) agreement to raise the limit made sense under the circumstances for several reasons. 

First, the legislation provided a specific dollar amount that should be adequate to last past the midterm elections based on current law and Congressional Budget Office projections rather than the Democrat’s proposed suspension of the debt ceiling, which would have represented a “blank check” to help facilitate their desire to grow government further. Second, shutdowns are disruptive and costly, especially since federal employees are paid retroactively once the shutdown is over even though they did not work during the shutdown. Third, Congress is not yet prepared to make the tough spending cuts and revenue reforms necessary to restore fiscal sanity and sustainability. Finally, 2022 is a midterm election year which should provide a basis to demonstrate leadership and hear the American people’s opinion regarding our nation’s present condition and future direction.  

The most recent debt ceiling action was based on a frequently made false claim. Specifically, many have asserted that failure to raise the debt ceiling would result in a federal default. Section Four of the Fourteenth Amendment to the Constitution states “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions or bounties for services in suppressing insurrection or rebellion, shall not be questioned.” While we no longer have any pension or other obligations associated with the Civil War, federal debt subject to the debt ceiling has skyrocketed and is rapidly approaching $30 trillion.   

The above constitutional provision effectively means that the only current federal financial obligation that is guaranteed by the Constitution is federal debt and accrued interest on said debt. Social Security, Medicare, Medicaid and financial obligations associated with every other federal government program and activity are not guaranteed by the Constitution no matter how important they may be. As a result, rather than defaulting, Congress and the president would be required to make significant spending cuts to avoid violating the debt ceiling since the federal government must honor its federal debt-related obligations.  

Unfortunately, Congress has refused to make tough spending and revenue choices in the past and continues to kick the can down the road despite clear and compelling evidence that the country is on an imprudent and unsustainable fiscal path.   

It is time to quit crying wolf about the debt ceiling and recognize the reality that it has been a dismal failure in helping to ensure fiscal responsibility and sustainability. To create a better future, at least three actions are necessary.  

First, the debt ceiling should not be extended further. Rather, it should be repealed and replaced with a public debt/GDP limit with targets, triggers and automatic enforcement mechanisms.  

Second, Congress needs to enact a new statutory fiscal sustainability commission that will actively engage the American people regarding our nation’s fiscal challenge, solicit input from citizens and key interest groups regarding possible reforms and make a package of reform recommendations that will receive a guaranteed vote in the Congress. It is unrealistic to expect that these tough fiscal choices will be made via the regular order absent a major crisis which we need to avoid.  

Finally, we need to adopt a fiscal responsibility amendment to the Constitution. For example, an amendment that would set a public debt/GDP “credit card limit” and a lower and sustainable targeted level of public debt/GDP that would be achieved by a date certain in the future. There should be extremely limited and temporary (e.g., annual) exceptions to the limits. Any temporary exceptions would require a supermajority vote in Congress and the signature of the president. If Congress is not willing to achieve a fiscal sustainability amendment, the states should do so through a limited Article V convention. I expect a major announcement regarding this option soon.  

The American people’s confidence in Congress and the president’s overall approval ratings are at or near an all-time low. It is time for real leadership in Washington on our fiscal challenge. It is in the interest of both major political parties to do so since failure to act will ultimately have severe adverse economic, national security, and domestic tranquility consequences. We owe it to our country, children, grandchildren, and future generations of Americans, to properly discharge our stewardship obligation.  

Hon. David M. Walker is a Defense Business Board member. He served as U.S. comptroller general from 1998-2008.