For all the wrangling, debt ceiling hasn't limited debt

WASHINGTON--If there's one thing Republicans and Democrats can agree on in the current debt-ceiling standoff, it's that the nation's legal borrowing cap has failed in its primary goal: limiting the nation's debt.

 

After all, how can anyone argue that the debt ceiling has served to rein in federal borrowing, when the cap has been lifted at least 80 times and the U.S. government is in the red to the tune of about $14.3 trillion?

 

"The real impact in limiting spending is really questionable," said Sen. Richard Blumenthal, D-Conn., who as a freshman senator is one of the few lawmakers who has never had to vote on a debt-ceiling increase before.

 

Indeed, some lawmakers and budget watchdogs say the current crisis should prompt a broader debate over whether the debt-ceiling is a well-intentioned policy gone terribly wrong, or a still-useful tool that needs to be tweaked.

 

"As a mechanism for controlling the debt it obviously a manifest failure," said Rep. Jim Himes, a 4th District Democrat and former Wall Street investment banker. "You've got this thing which is useless, but very dangerous."

 

Until now, Himes noted, the debt ceiling has only be used "for small stakes political poker." But the current crisis involves a much bigger gamble.

 

Congress faces an Aug. 2 deadline, at which point Treasury officials have said they will not have enough money to pay the U.S.'s current financial obligations and will be at risk of defaulting. Despite that deadline, lawmakers remained at loggerheads on Tuesday over a debt-reduction package that would pave the way for a debt-limit hike.

 

And now that Congress has edged this close to a default, lawmakers may be tempted to replay this high-stakes game of chicken each and every time a new increase is needed.

 

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