Opinion: The debt ceiling - Why are Social Security recipients continuously threatened with its passage?
2023-06-01
The debt ceiling is an issue that resurfaces in American politics time and again, often leading to intense debate and, sometimes, governmental gridlock.
The Debt Ceiling Debacle.Photo bythe author using PowerPoint Design Creations
This recurrent issue raises pertinent questions, such as: why does the debt ceiling hold us hostage, and is there a better way?
Although the recent vote by Congress appears to have waylaid the budget crisis (overwhelmingly, in fact: 314-117 in favor of raising the debt limit), at least temporarily until 2025, however, the next Congress and POTUS must start this sparring drill once again almost immediately after being sworn into office.
Why are Social Security recipients continuously threatened with not receiving benefits if there is a default? We pay into this program throughout our working lives, and the government borrows from it to boost its partisan projects. Yet, the media’s first response when there is talk of a default is to say Social Security and VA benefits might not be paid if a resolution is not forthcoming.
They do that because Social Security recipients make up the most significant block of voters in every election.
What is the debt ceiling & Why do we have one?
The debt ceiling is a legislative limit on the amount of national debt the federal government can incur. Established by the Second Liberty Bond Act of 1917. The debt ceiling was initially aimed at facilitating the U.S. entry into World War I. The Act allowed the Treasury to issue long-term securities without obtaining Congress's approval for each new debt issue.
Over the years, the debt ceiling has become a tool for Congress to assert fiscal control. However, it has also turned into a perennial cause of political strife, with potential repercussions for the national and global economy.
Is there a better way & Why don't we do it?
One may ask: if the debt ceiling is such a contentious issue, why not find an alternative? Theoretically, Congress and the President, who write the laws and approve the annual budget, could adjust or even abolish the debt ceiling. They could move towards a system where spending and revenue decisions automatically dictate borrowing, similar to other developed countries.
However, removing or modifying the debt ceiling is easier said than done. That’s particularly true in the current Congress where the Republicans hold a slight majority, 222-213, and the Democrats, with three Independents who caucus with the Dems, hold a slight majority in the Senate, with the VPOTUS, as the Senate President holding the tie-breaker vote.
Politically, the debt ceiling is a powerful bargaining chip. It can be leveraged during budget negotiations, influencing policies and spending. This gives it an almost sacrosanct status in the political arena, despite the regular turmoil it triggers.
The pros & cons of the debt ceiling
Like any policy, the debt ceiling has its pros and cons. On the one hand, it provides a check on government spending and borrowing. It forces lawmakers to review fiscal policies periodically and prompts discussions on fiscal responsibility and debt sustainability.
On the other hand, the debt ceiling can cause significant political uncertainty. Threats of not raising the ceiling can lead to financial market volatility and can impact the creditworthiness of the U.S. Moreover, the ceiling does not control or limit the government's ability to incur obligations but only its ability to pay them off.
What would happen if we defaulted?
Although we averted a major meltdown once again, what would happen in 2025 if a House Majority Leader is not immediately chosen, as was the case in 2022? Nothing happens in the House without a Speaker.
If the debt ceiling isn't raised and the U.S. defaults on its obligations, the repercussions could be severe. Defaulting could lead to a downgrade in the country's credit rating, an increase in borrowing costs, and a potential economic recession. It would also harm the U.S.'s reputation as a reliable debtor, potentially affecting the global financial system, given the centrality of U.S. treasury bonds in world finance.
While the exact consequences of such a default are hard to predict, they are universally agreed to be detrimental. Despite this, the debt ceiling issue remains a hot-button topic in U.S. politics, holding the potential to reemerge and cause potential economic disruption.
The U.S. debt ceiling is a complex issue with deep historical roots and significant political implications. It seems that we'll continue to grapple with it unless our lawmakers can agree on a new approach to federal debt management.
If you’re interested in making a side hustle from writing about local news, sign up using my referral link, and we can both make more. Don’t forget to use your link when you write.
About the author
Stephen Dalton is a native of Old Town, ME, and a retired US Army First Sergeant with a degree in journalism from the University of Maryland. He is a Certified US English Chicago Manual of Style Editor. Top Writer in Travel, Food, Fiction, Transportation, VR, NFL, Design, Creativity, Short Story, and a NewsBreak Community Voice Pro.
A lot of people failed at what you accomplished simply because they were busy finding problems while you ZUUKSMINERSS @IN_STAGR#M were busy finding solutions Every time you do a good job you polish yourself one more time Shine on mates well done
Get updates delivered to you daily. Free and customizable.
It’s essential to note our commitment to transparency:
Our Terms of Use acknowledge that our services may not always be error-free, and our Community Standards emphasize our discretion in enforcing policies. As a platform hosting over 100,000 pieces of content published daily, we cannot pre-vet content, but we strive to foster a dynamic environment for free expression and robust discourse through safety guardrails of human and AI moderation.
Local News
