Word this week that Congressional Republicans ended their obstruction on a clean debt ceiling increase brought a sigh of relief to Washington and global financial markets alike. After all, a U.S. default arising from a refusal to pay the bills Uncle Sam has already incurred would have meant, as Speaker John Boehner himself once described it, "financial disaster, not only for our country but for the worldwide economy."
Hopefully, the apparent respite from the GOP's extremely dangerous--and already very damaging--debt ceiling hostage-taking will be a permanent one. Because as a quick glance at the numbers shows, over the next decade the White House and Congress--regardless of the party controlling them--will have to raise the debt ceiling repeatedly.
The new long-term budget forecast from the nonpartisan Congressional Budget Office (CBO) above tells the tale. Over the 10 year period from fiscal year 2015 through FY 2024, the federal government is projected to spend $48.5 trillion while collecting only $40.6 in tax revenue. All told, over that decade Uncle Sam will add a total of $7.9 trillion to the U.S. national debt.
That future presidents and Congresses will and must increase the Treasury's borrowing authority time and again is no secret. Speaker Boehner has acknowledged this inescapable truth more than once.
His first warning came just days after the GOP swept to power in the midterm elections of 2010. "We're going to have to deal with it as adults. "Whether we like it or not," the Speaker-Elect admitted, "the federal government has obligations and we have obligations on our part." Then In April 2011, he spoke the truth to a gathering of Tea Party activists in his home state of Ohio. Boehner was asked if he would agree to boosting the debt limit:
According to half a dozen attendees interviewed by Reuters, the most powerful Republican in Washington said "yes."
"We're going to have to raise it again in the future," he added. With the mass retirement of America's Baby Boomers, he explained, it would take 20 years to balance the U.S. budget and 30 years after that to erase the nation's huge fiscal deficit.
In May 2012, Boehner acknowledged that the Paul Ryan budget almost all Republicans backed would violate "my simple principle of cuts and reforms greater than the debt limit increase":
"Yeah, the big bad House Republican budget that would just gut everything under the sun, according to my friends across the aisle, would still require a $5 trillion increase in the debt ceiling over the next 10 years. Why? Because of the great big demographic bubble -- baby boomers like me, that are going to retire and continue to retire for the next 20-25 years. It's a big challenge."
Now, conservative Default Deniers like Ted Cruz, Rand Paul or the Club Growth would argue the federal government could slash spending in order to avoid future debt ceiling hikes. But that fantasy runs afoul of both basic math and economic reality. The government wouldn't just have to gut outlays by one-sixth over the next 10 years. The cutting would have to begin immediately. Shrinking government spending by 15 plus percent would have a devastating impact on the U.S. economy. As it is, Uncle Sam is spending less now than when Barack Obama first took the oath of office and non-defense, discretionary spending as a share of the American economy is at its lowest level since the early 1960's. Bear in mind also, as the CBO chart below reveals, that federal spending and tax revenues as a percentage of GDP are in keeping with historical averages. (Note also that every time America balanced its budget since 1960, tax revenue was around 20 percent of GDP).
Ultimately, Uncle Sam needs more tax revenue and needs to slow the growth of health care costs in general and Medicare in particular. But that process takes time. And with the sluggish U.S. recovery already suffering from public sector austerity at the federal, state and local level, now is not the time to start.
That should be just fine with John Boehner, Paul Ryan and even the most delusional Tea Party debt ceiling obstructionists. Acknowledging that the national debt as a percentage of the U.S. economy roughly stable over the next several years, Boehner admitted last spring:
"We have no immediate debt crisis."
But we will have an immediate crisis if Republicans don't agree to raise the debt ceiling in a timely way now and for years to come. That really shouldn't be a problem. After all, Ronald Reagan signed 17 debt ceiling hikes while he was tripling the national debt. President Bush got seven more--including a "clean" $800 billion increase in 2004-while he was nearly doubling the national debt thanks to two tax cuts, two wars, the unfunded Medicare Part D prescription drug program and TARP. And today's GOP leadership team of Boehner, Ryan, Cantor, McConnell and John Cornyn voted for all of it.
Members of the minority--as Senators Harry Reid and Barack Obama--can and do cast symbolic votes against debt ceiling increases, especially when they are included as part of a larger bill they oppose. But only since the Republican majority took over the House has one party had both the intent and the votes to block the once-routine debt ceiling hike and thus trigger a global economic cataclysm.
It's long past time to stop pretending that right-wing extortion over the debt ceiling is anything else. No matter who wins the next election, the federal government is going to have to raise the roof by several trillion dollars more.
