United States Debt Ceiling (1940-2013)

The United States debt ceiling has been effectively neutered as part of the October 2013 spending law.

The U.S. Senate invoked cloture on S. 1569, the Default Prevention Act, on October 12, 2013, by a vote of 53-45.

• As National Journal put it, if it became law, it would "Fundamentally change the way the debt ceiling works."  
• Breitbart said it "would take away the Congress’ power to increase the debt ceiling."

That policy switched legislative vehicles and in the October spending bill, H.R. 2775, became Section 1002 which "may be cited as the 'Default Prevention Act of 2013,'" becoming Public Law 113-46.

On final passage of the deal, Politico reported, "The legislation also includes a McConnell-written proposal that would allow Congress to disapprove of the debt-ceiling increase. Lawmakers will formally vote on rejecting the bump of the borrowing limit - if it passed, it could be vetoed by Obama."

The Hill's Floor Action blog reported simply, "The deal also gives the Treasury Department the ability to borrow beyond the debt ceiling."

Don't count on Wikipedia for information on this law change just yet.  As of this writing, there is no entry for this law-within-a-law, and articles on U.S. public debt and the debt ceiling history make no mention of it either.

The morning the bill was passing, Daily Kos concluded, "Section 1006 (sic) of the debt ceiling bill appears to make another debt ceiling crisis much more difficult for Congress to initiate. In addition to permitting the administration to increase borrowing unless forbidden by congress - the opposite of the past in which borrowing beyond the ceiling required permission, it seems to me that new debt ceiling legislation is fast-tracked through both houses."

Few have put into words how dramatic this shift is in American public policy.

This has two significant effects going forward:

First, the Administration now has a vastly strengthened hand to spend as it sees fit without any meaningful resistance from Congress.  If spending policy writ large were like Swiss Cheese, those holes virtually just became super-conduits for the flow of money to Administration priorities.  They know this, and they are not talking about it.

Second, where the Administration does not yet have spending authority, its hand has been significantly weakened.  The Republicans were more than ready for a prolonged shutdown, funding only essential functions along the way as they saw fit, Affordable Care Act implementation obviously not being among essential functions.

It was the Administration's unwillingness to consider a debt ceiling bill separate from a spending bill coupled with overheated rhetoric about the consequences of not raising the debt limit that forced the issue.

Now, with the debt ceiling no longer on the table as part of spending negotiations, guess who has the upper hand?  The response in December was to cede ground and increase spending in the budget deal.

Next week, the House resumes consideration of spending legislation.  Congress should stand strong and hold the line on spending.  That became more difficult than necessary with December's "Bipartisan Budget Act."