Increase the debt responsibly
Playing political games with the federal budget is nothing new; the only thing that changes from time to time is which side gets to play the role of fiscal hawks and which side plays that of the doves.
Six years ago, President Clinton's Treasury secretary, Robert Rubin, came up with a way of juggling funds to get around the national debt limit, which Congress had refused to increase. Republican members of the House threatened to impeach him.
This past week, when President Bush's Treasury secretary, Paul O'Neill, transferred money from the Federal Employees Retirement System to non-interest-bearing accounts in order to avoid default, there wasn't a peep out of Republicans, and Democrats resisted the urge to scream for his impeachment.
Avoiding default is no small thing, and O'Neill was right to do so. U.S. Treasury bills are among the most secure investments in the world, and for that reason carry a relatively low interest rate. Any glitch could drive investor confidence down and interest rates up, costing U.S. taxpayers billions of dollars.
O'Neill did what he had to do, and he did it because Republicans and Democrats in Congress can't agree on how to raise the national debt ceiling, although almost every senator and representative knows it's going to have to be done.
The debt ceiling now stands at $5.95 trillion dollars. O'Neill wants to increase it by $750 billion, to $6,745,000,000,000. We put all the zeros in that time just to give a little better sense of how many dollars are involved. Put another way, based on a U.S. population of 281 million, the debt works out to an average of $21,200 for every man, woman and child now, and that would increase to $24,000 each.
Bone of contention: The Republicans in the House are willing to raise the debt, but only if the enabling legislation is tacked on to a more popular bill, such as funding for homeland security. Senate Democrats say that any increase in the debt limit has to be a free-standing measure on which the ayes and nays are transparent.
We agree that elected representatives should stand up and be counted on something as important as raising the debt limit. A year ago, O'Neill was predicting that the limit wouldn't have to be increased for eight years because of the projected budget surpluses. Granted, a lot has happened in that year, but not so much that we're willing to see the debt limit increased with virtual anonymity.
Also, if the limit is going to have to be increased by as much as 13 percent, it shouldn't be done in one fell swoop. Since 1917 when the debt limit was established at $11.5 billion, history has shown that Congresses and administrations are more comfortable borrowing right up to the limit than they are cutting programs or raising taxes.
Of course, increasing the debt limit is just like raising taxes -- on our children and grandchildren.
It's time for Congress to pursue truth in borrowing. Increase the debt limit on an open vote and only for as much as might be needed this year.