It’s Time to Put a Brake on the Debt-Ceiling Charade

The debt-ceiling charade is upon us again. The U.S. will hit its debt ceiling on Thursday. Treasury secretary Janet Yellen warns us that without increasing it by June, the U.S. will not have sufficient funds to pay its bills.

Meanwhile, House speaker Kevin McCarthy and his Republican colleagues float the idea of debt prioritization, instructing the Treasury to first prioritize debt-service payments, then Social Security, Medicare, and veterans’ benefits, and finally military funding. These budgetary gimmicks were also floated during the debt-ceiling standoff in 2011 and 2013 but were never enacted. It is safe to say that neither party wants a government shutdown such as that in 2013, 2018, and 2019. What can be done?

U.S. debt has increased more rapidly than national income for more than half a century, creating what is often termed “debt fatigue.” The Congressional Budget Office reports that federal debt held by the public as a share of GDP increased to 98 percent in 2022 and is projected to increase to 185 percent by 2052, implying that Americans’ debt fatigue will only worsen. The fiscal rules enacted by Congress to constrain debt have clearly failed, and the federal government has virtually abandoned any semblance of a rules-based fiscal policy. Indeed, the debt ceiling has been routinely lifted or suspended, and the spending caps imposed by the 2011 Budget Control Act have been largely flaunted and were allowed to expire in 2022.