The 2011 Debt Ceiling Debate, Essay Example

The debt ceiling debate that took place in Washington D.C. in recent months was an entirely unprecedented situation. Prompted largely by a small group of constituents to which House Speaker John Boehner and a few other Republican politicians were beholden, the discussions about the debt ceiling turned into a virtual circus. Never before in the history of the debt ceiling were any sorts of political games played (Indiviglio). The Republicans who control the House of Representatives took the position that freezing the debt ceiling would provide leverage to force President Obama to agree to a series of budget cuts. They believed it was a reasonable political strategy. The other view, taken by the Democrats, is that the debt ceiling had never before been used in such a manner (in fact, it is most likely that much of the U.S. public had never even heard of the debt ceiling before this situation). I believe the facts support the Democrats position that using the debt ceiling as a political tactic was both unprecedented and dangerous.

In the simplest of terms, the debt ceiling is simply an accounting function. It is based on the United States being able to make food on debts and financial obligations that have already been approved by the government. It has no connection to future spending, nor does it have any real connection to actual government spending (Smith). Decisions made by Congress about how and where to spend money are made through various legislative processes. Once these spending decisions are made, the debt ceiling is determined as the figure at which these obligations can be met. First put into place in 1917, the debt ceiling is quite literally just the figure that represents how much money Congress has already decided to spend. In the past, when spending decisions changed, for whatever reason (unforeseen military actions, for example), the debt ceiling was raised as a matter of course. Again, it simply represented the amount of money Congress had already agreed to spend (Smith). Never before in the nearly hundred years it has been in place has it ever been used as a political football, as a means of one party to hold the United States economy hostage in the manner in which it was in the summer of 2011. In an entirely unprecedented series of maneuvers, a small but influential group of political constituents pressured certain members of Congress to use the debt ceiling issue as a means of forcing President Obama to accede to their financial demands )Indiviglio).

As noted, the debt ceiling was first put into place in 1917. Congress, recognizing that the spending needs of the federal government were growing larger, wanted to place some sort of controls on how much money could and would be spent. As various political decisions were made, and legislation was passed that determined how much money the government would spend each year, the debt ceiling would then be applied. In other words, once the government decided to spend X amount of dollars in a fiscal year, the debt ceiling was practically nothing more than an announcement that the government would spend no more than that amount in that year. It was, by its nature, a retroactive determination. It was never a means of Congress determining ahead of time that they could and would spend a certain amount of money, and would raise the debt ceiling to ever-higher heights. It was just a final determination, after all spending decisions were made, that Congress would spend no more than that amount in that year (Smith; Indiviglio).

Despite that function of the debt ceiling, it actually was raised quite often, by both Democrat and Republican-controlled Congresses. During wartime, for example, unforeseen spending needs would often require that the government would appropriate more money to various needs. And as these decisions were made, the debt ceiling was then raised accordingly. It was simply an accounting decision that helped to make spending understandable and workable, but it was never a means of spending more money than had been previously decided, or was it connected in any way to the nation’s deficit spending (where the government borrows money to cover expenses of spending). Tying the two together (government spending and the debt ceiling) was simply ever done, as the two are, for all intents and purposes, entirely unrelated (Austin).

That is what makes the current issues about the debt ceiling, and the manner in which it became a virtual game of “chicken” between the Congress and the President so utterly out of character. To better understand the nature of the situation, it may help to take a closer look at some of the players involved. As many are aware, a movement that labeled itself the “Tea Party” (as a reference to the Boston Tea Party that fought British taxation two centuries ago) came together in the wake of President Obama’s election. Though the members of the Tea Party claim that their sole interest lies in reducing government spending, it does seem a bit odd that no such movement formed when President George W. Bush raised the United States deficit by trillions of dollars during his time in office. When he moved into the White House, President Bush inherited a thriving economy, and a budgetary surplus of billions of dollars from the Clinton administration (Smith). These surpluses were predicted by the Congressional Budget Office to last into the foreseeable future. It seems almost impossible to believe that Bush was able to run up such enormous deficits while in office; beyond that, he lowered the top tax rate on the wealthiest of Americans to 32%, while at the same time instigating two occupations of Middle Eastern nations that show no sign of ever ending. These occupations have already cost the United States trillions of dollars, and with no indication that they will be ending for decades to come, it is impossible to calculate how many more trillions of dollars will be spent to continue those occupations (Smith & Williamson).

While Bush was in office, and running up the nation’s debt to unprecedented levels, no “Tea Party” was formed to combat government spending. In fact, Bush was supported wholeheartedly by the Republicans, who were happy to reelect him for a second term so he could continue to spend untold trillions of dollars, ensuring that the United States would be in debt for decades to come, rather than running a budgetary surplus as had been done in the final years of the Clinton Presidency. It is difficult for any objective observer not to question the motives of many of the “Tea Partiers,” who are largely white, middle-aged, and middle class. Despite the fact that President Obama actually lowered taxes on the middle class, while also allowing the “Bush Tax Cuts” to remain in place for several more years, he was labeled by the Republicans as someone who wanted raise taxes and increase government spending (Smith & Williamson).

In the most cynical fashion, the Republicans whipped the Tea Partiers into a frenzy, insisting that it was President Obama who was responsible for the incredibly high levels of government debt, despite the fact that he had inherited the bulk of the debt from the Bush administration. While it is true that President Obama did take some actions that added to the debt, most of these actions had short-term effects, such as the “bailout” of several large financial firms, whereas President Bush’s spending had virtually permanent effects, as much of it was tied to such things as the Middle East occupations, and spending on Medicare-related drug programs(this last decision was made shortly before his reelection; some saw it as a means of “buying” the votes of the elderly, who relied on Medicaid) (Smith & Williamson).

During Bush’s presidency, the debt ceiling was raised numerous times, and no one from Congress or from any “Tea Party” complained about it. In fact, most Americans had likely never even heard of the debt ceiling until it was used as political tool by the current House Republicans. Former President Ronald Reagan, who has taken on legendary status among Republicans, raised the debt ceiling an unprecedented seventeen times during his eight years in office, and again, there were no complaints from anyone in his party or the Democrat part for such decisions (Indiviglio). Again, that is because the debt ceiling is virtually meaningless; it is the legislation about actual spending that matter. Those are where the traditional battles have always been waged. Once those wars have been fought among the members of Congress and the President, the debt ceiling has always been nothing more than a mere formality, an announcement that says ‘this is how much we’ve decided to spend.” And even then, after determining the debt ceiling, Congress often simply decides to spend more money, and raises the debt ceiling accordingly (Smith).It is not just Republican Presidents who have raised the debt ceiling, of course; it has been raised by nearly every President who has held the office since 1917. Still, it is ironic that Ronald Reagan, the hero of the Republican Party, was responsible for raising the debt ceiling more times than any other President in history.

Though the current situation involving the debt ceiling is in some ways fairly complicated, there are some parts of it that are relatively simple to understand. The birth of the Tea Part movement –a group of people who simply oppose government spending, though without necessarily understanding the complicated issues involved- evolved in the wake of President Obama’s election. Certain members of Congress (primarily Republicans) took advantage of this movement to apply pressure on President Obama not to raise the top tax rate on the wealthiest of Americans. Despite the fact that we are currently fighting two major, and very expensive, wars, the top tax rate is at one of the lowest levels in United States history. The Republican Party, beholden to the wealthiest of the wealthy, is staunchly opposed to raising the top tax rate, despite the fact that dwindling government revenue is making it difficult for the United States to afford to pay for all of its obligations. More than anything, that is what this whole debacle has been about: the Republicans were holding the government hostage, threatening to allow the United States to default on its debt payments as a means of forcing President Obama to drop his demands for higher taxes on the wealthiest of the wealthy (Smith & Williamson).

By refusing to raise the debt ceiling –which would have caused the first United States default in history- the Republicans forced President Obama to give up on raising the top tax rate. In addition, the republicans demanded an agreement to cut spending by several trillion dollars over the next ten years. With no new revenue coming in from an increase in the top tax rate, and an insistence on cutting spending, it will once again be the middle class that suffers. Spending cuts will be made to programs like Social Security and Medicare, while the wealthiest of the wealthy will continue to enjoythe lowest tax rates most of them have ever paid. This situation shows no signs of improving, and it seems that the middle class will continue to be squeezed for more and more taxes, while at the same time losing more and more government benefits that they have paid for through their taxes (smith & Williamson). At some point, this system will collapse, because it is impossible to continue asking the least-wealthy Americans to foot the bills for expensive wars and other government programs. The facts of the situation clearly prove that the Republican strategy to use the Debt Ceiling as a political tool was both unprecedented and, in both the short term and the long run, dangerous to the U.S. economy.We can only hope that some politicians will be elected who can and will have the courage to change the system before it is too late.