Debt Ceiling: A Good Vehicle for Budget Process Reform | Citizens Against Government Waste
The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Debt Ceiling: A Good Vehicle for Budget Process Reform

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact

On March 7, 2017, the Congressional Budget Office (CBO) announced that if the debt ceiling was not raised or extended before March 16, the U.S. Treasury would be unable to borrow funds for standard operating procedures.  Since then, the Treasury has been forced to use accounting maneuvers known as “extraordinary measures” to keep the government running, but these work-arounds will only delay the inevitable debate that Congress must have.  Eventually, Congress will have to decide how to address the debt ceiling, or the federal government will default on its payments and risk an economic crisis.

Congress is no stranger to dealing with the debt ceiling.  It was raised 14 times from 2001 to 2013, often with handwringing by both fiscal hawks and big spenders (they also saw opportunities to advance their causes).  The most recent attempt to address the debt ceiling was the Bipartisan Budget Act of 2015, which suspended the debt ceiling until March 15, 2017, rather than raising the maximum amount the Treasury could borrow, as had been standard practice.

On May 24, 2017, Treasury Secretary Steve Mnuchin told Congress that he wanted a “clean” debt ceiling, meaning that no policy riders or initiatives should be attached to the legislation.  But clean debt ceiling bills are fairly unusual.  Members of Congress view this must-pass legislation as an opportunity to attach riders, some of which are budget-related, and some of which are unrelated.  For example, automatic spending reductions (sequesters) and constitutional amendments for balanced budgets have been attached in the past, as well as funding for emergency aid to states.

Provisions that reform the (clearly broken) budget process are being considered for the upcoming debt ceiling bill.  This would help to resolve the maze of waivers, gimmicks, and weak requirements that allow Members of Congress to skirt their fiduciary duty to safeguard taxpayer dollars in the authorizing and appropriating process.  In the 114th Congress, then-House Budget Committee Chairman Tom Price (R-Ga.) released a budget reform proposal.  It included:  systematic reductions in programs that remain unauthorized, which totaled $310 billion in fiscal year 2016; eliminating budget gimmicks, such as allowing asset sales to offset spending increases; eliminating built-in discretionary inflation; and establishing uniform budget rules for the House and Senate. 

Another potential amendment to the debt ceiling bill is the Full Faith and Credit Act, which was introduced by Rep. Tom McClintock (R-Calif.) in the 113th Congress.  The bill would require the Treasury to issue debt not subject to the statutory limit to make principal and interest payments.  In other words, the Treasury could borrow funds above the debt ceiling, but only to service U.S. bondholders and make payments to the Social Security Trust Fund, mitigating the threat of the default.

Instead of simply voting to raise or suspend the debt ceiling again, Congress should address one of the causes of the problem.  Congress has failed for decades to keep regular order of the budget process, allowing spending to increase with little or no oversight.  Budget reform could help the Treasury from being forced to take extraordinary measures on the debt ceiling yet again.


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