The huge budget and spending deal that is poised to pass this week shows that Congress’ preferred method for dealing with the debt ceiling is to pretend it doesn’t exist.
In past decades, Congress would raise the debt ceiling to some new, higher number, which would allow Congress to spend money until it hit that new level.
But for the last few fiscal crises, Congress has leaned on the idea of “suspending” the debt ceiling. That method allows Congress to keep borrowing and spending until a certain date.
When that date arrives, the new debt ceiling becomes whatever old debt existed plus any new debt that was accrued during the suspension.
For the first few crises under President Obama, Congress went the traditional route and raised the debt ceiling to a new borrowing level. But Congress used a suspension of the debt ceiling in early 2013 and then again in late 2013, and again in early 2014. That last suspension lasted until March 2015.
By then, the debt ceiling was pegged at $18.1 trillion, and the government has been able to stay under that total limit by exercising “extraordinary measures.” Those measures included putting a temporary stop to certain debt issuances in order to stay under the limit.
Congress is once again leaning on a suspension of the debt ceiling in the latest fiscal crisis. The bill released by Republican leaders late Monday night includes language to suspend the debt ceiling for the longest period of time seen in the last few years, nearly 18 months.
The bill says the debt ceiling “shall not apply for the period beginning on the date of enactment of this act and ending on March 15, 2017.”
The move implies that by early 2017, the national debt will be somewhere north of $19 trillion.
The debt ceiling today is $18.1 trillion, and the debt will likely jump up a bit once Treasury’s extraordinary measures are no longer in effect. The government is running budget deficits of around $500 billion per year.
Read a copy of the fiscal compromise below. Language on the suspension of the debt ceiling is found in section 901 of the bill:
