Submitted by Mike Appleton (Guest Blogger)
The debate raging in Congress over increasing the so-called “debt ceiling” makes for wonderfully frenetic headlines. It allows Republicans to play pin the blame on the donkey and Democrats to respond with accusations of irresponsible brinkmanship. In the end it is likely that a bill in some form will be passed because the government must pay its bills.
But lost in the frenzy is a fundamental question. The budget is determined by Congress through the appropriations process. Therefore, Congress essentially determines the amount of the nation’s debt. The borrowing authority granted by Congress to the Treasury provides flexibility in financing that debt. The executive branch cannot spend more than is appropriated, nor borrow more than is needed to service debt.
So, since Congress controls the purse strings, and the power of the President is limited to implementing the fiscal will of Congress, why is it necessary to periodically debate Treasury’s borrowing authority? More specifically, is there any logical reason for the imposition of the misnamed “debt ceiling”?