Normally, Republicans argue against raising the debt ceiling, which is the maximum amount of money that the government can borrow.
The debt ceiling was constructed at a time after the Great Depression and before WWII as a way to get members of Congress to actually make a decision.
As he prepares to enter his second term, President-elect Donald Trump has talked about dramatic cuts to federal spending, yet he’s also saying he wants the debt ceiling raised. Trump has called the debt ceiling “ridiculous,” suggesting that it’s not necessary.
But if the debt ceiling goes away, what could be the consequences?
Casey Burgat, director of the Legislative Affairs program at George Washington University, joined WTOP’s Shawn Anderson and John Domen to discuss the reasoning behind the debt ceiling and how it works.
Listen to the full interview below or read the transcript, which has been lightly edited for clarity.
Casey Burgat: The debt limit is a little bit different in that it’s just the maximum amount that the federal government can borrow. And this has increasingly been used as a huge leverage play, particularly on the Republican side to say, “Hey, give me the spending cuts I want, or other policy proposals I want, or we’re going to default on our debt.”
Republican, Democratic economists of both stripes will say that this just simply can’t happen, that it’ll be the Great Depression on steroids. So it makes sense. A lot of smart folks are saying, “Get rid of this debt limit thing, because it’s been used as a political football in a way that it was never intended to be.”
Shawn Anderson: So as someone who has studied this topic, how strange is it to see an incoming Republican president demand that the debt ceiling be raised?
Casey Burgat: Well, this one in particular has been a huge leverage play for Donald Trump when he was president, and even on the outside looking in to tell the Republicans to use this as a negotiating tool. But this is where you really see that it’s different when you sit behind the desk, that he wants to get rid of it, or at least outside of his next administration, 2029, being the magic number there, because it is incredibly dangerous.
The only thing worse than the debt limit being breached is that it’s breached on your watch. And he wants to get rid of that, at least for his administration. But I think he recognizes that to do that, he may have to compromise and say to get rid of it altogether, so that at least Democratic presidents can benefit from its elimination, too.
John Domen: What would happen if we did just get rid of it altogether?
Casey Burgat: You’ll likely see less negotiating on spending at all. This was written in a time where we wanted to at least make Congress have to make at least one tough choice. So spending is one thing, but then you have to pay for it as a second choice. And the debt limit was saying we want members of Congress to actually be on the hook to say, “Yes, we not only want this spending things, and who doesn’t want to spend taxpayer money, but also that we want to make them take a vote with their name attached to it, to raise it.”
So what would happen is that we’re likely to see less pushback on the federal deficit if we’ve had that even at all. So we may have already outlived its usefulness to the present day.
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