As the president prepares his State of the Union speech, he must worry that another regular Washington event will overshadow it: the vote to increase the national debt ceiling. But instead of concentrating on this figure, the president and congressional leaders should focus on the economy. That way, global markets – the real regulators of the debt ceiling — will be less likely to decide that we can’t borrow any more, even if the pols say it’s OK to do so. Today’s debt limit is nearly $14.3 trillion; we’ve already borrowed $13.8 trillion. Since, as usual, the government is running a deficit?, not a surplus, the House and Senate must vote to allow Obama’s Treasury Department to borrow more. Some Republicans plan a “showdown” instead, as Sen. Jim DeMint, R-S.C., put it. “We are not going to increase our debt ceiling anymore. We are going to cut … to stay within the current levels,” he said.
Such brinksmanship wouldn’t be unprecedented, a fact that Obama could point out in his speech. In November 1985, when the ceiling was $1.8 trillion, President Reagan wrote in his diary that “if we don’t have an extension of the debt ceiling by the 15th, we will have to sell gold or default on bonds.”
