There’s more to the debt-ceiling talking point
Published on May 22, 2023 at 2:13pm CDT
By Tim Douglass, Publisher of the Pope County Tribune
As debt ceiling negotiations–something of an oxymoron–continue to edge closer to the June 1 deadline, we hear a lot about government budgets being compared to the “family budget.”
I their debt ceiling negotiations with President Joe Biden, Republican leaders have called for budget cuts and framed their efforts in a way most Americans would understand: as kitchen-table family budgeting.
“What we do is, once we set the baseline, we go forward and we decide, Republicans and Democrats, what our priorities (are),” said House Speaker Kevin McCarthy, R-Calif., on May 11. “It’s the exact same thing that every single American family does.”
Except there is major differences.
McCarthy is right that government budgeting and family budgeting has some similarities. But “it’s an overly simplistic talking point,” said Steve Ellis, president of the nonprofit Taxpayers for Common Sense.
In the long term, both governments and families can face consequences if their expenses are far out of whack with their income.
“The basic notion that you have to live within your means is true for both,” said Douglas Holtz-Eakin, president of the center-right American Action Forum.
The United States’ publicly held debt is currently 97% of gross domestic product, a figure that represents the size of the entire U.S. economy. By 2032, the nonpartisan Congressional Budget Office projects that the figure will rise to nearly 115%.
Unchecked, that will require ballooning interest payments that will crowd out money for other needs.
But getting a majority of members in the House and Senate, the president, executive branch agencies and countless interest groups in line is far harder than wrangling the family into a budget concensus.
We need to remember that governments, unlike families, can raise taxes, sell bonds and print money. And governments are essentially eternal, so the bill never really comes due.
Governments have wider responsibilities than families, too.
“The government has the responsibility to support the economy,” said Dean Baker, co-founder of the liberal Center for Economic and Policy Research. “That means when we had an event like the Great Recession or the (COVID-19) pandemic, the government had the responsibility for trying to boost the economy back to full employment, and to ensure that families stayed reasonably whole through the downturn. This pretty much by definition means running large deficits.”
And, don’t believe the partisan talking points that blame the current President or his party, or even the last president and his party. The blame for the federal deficit stretches back decades and can be claimed by both parties.
The discussion on the debt ceiling is not the time to negotiate budget amounts and balancing that budget. Congress needed to do that long before now and needs to do it on a continual basis each and every year. We need to raise the tax ceiling now, because of past budget decisions. Moving forward we need Congress to actually pass a budget first. Doing that is as challenging as a family budget when Mom and Dad can’t agree on the family income much less the family expenses.