Federal Reserve Chairman Ben Bernanke criticized the debt ceiling as an unusual device that can be used to prevent the United States from paying it’s bills, as he suggested that the country would be better off if the debt limit did not exist.
“I think it would be a good thing if we didn’t have [the debt ceiling],” Bernanke told students at the University of Michigan today. “I don’t think that’s going to happen. I think it’s going to be around.” Those remarks put Bernanke in agreement with Treasury Secretary Tim Geithner, who has said that Congress should eliminate the debt ceiling.
The conversation began when Bernanke was asked if the debt ceiling had any “practical value” as a matter of fiscal policy. “No, it doesn’t really have — it’s got symbolic value, I guess, but . . . no other countries in the world have this particular institution,” he said.
“If the Congress is approving spending and it’s approving taxing, and those two things are not equal,” Bernanke continued, “the way to addres it is by having a sensible plan for spending and a sensible plan for revenue and make decisions about how big the government should be or how small it should be.”
Lawmakers tend to have a higher opinion of the debt ceiling. “The president and his allies need to get serious about spending, and the debt-limit debate is the perfect time for it,” Senate Minority Leader Mitch McConnell, R-Ky., said today.
That’s a position that Senate Democrats have held as well. “I will not vote for raising the debt limit without a vehicle to handle this,” Sen. Dianne Feinstein, D-Calif., said in 2009, as The Washington Examiner’s Byron York recalled today.
Then-Sen. Evan Bayh, D-Ill., made the same point. “There are rare moments of leverage in this institution where you can implement fundamental change,” Bayh said of the debt limit. “This is one of those moments.”