THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING
Barbara Anderson

Debt ceiling crisis: How did we get here?

Ross Perot laughs with his wife, Margot Birmingham, after addressing the Reform Party convention in Pennsylvania in 1996. Ross Perot laughs with his wife, Margot Birmingham, after addressing the Reform Party convention in Pennsylvania in 1996. (File 1996/Associated Press)
By Barbara Anderson
July 23, 2011

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T HE LATE flurry of activity on the debt ceiling issue reflects the refusal to face problems until they become a crisis.

Here’s the background on how we got to where we are today.

Long ago, the United States paid for its declared wars by borrowing money. It reduced that debt when the war was over, but after the Vietnam War, the nation just kept spending and borrowing.

There was one period of concern about the debt in the early ’90s. Few people knew the difference between the deficit and the national debt when Ross Perot showed up with simple charts and a pointer to teach us about the worrisome numbers around irresponsible borrowing.

Like most political activists, Perot didn’t make a good politician. His 1992 and ’96 presidential bids failed, and his Tea Party-like movement, the Reform Party, fell apart when it tried to become an actual political party. But the Perot effect lasted awhile, with the newly educated electorate demanding a balanced budget. The effort became part of the Clinton presidency, and was supported by the Republicans who temporarily controlled Congress.

In the mid-’90s, the House passed the balanced budget constitutional amendment, but it failed in the Senate by just one vote. Soon the public moved on to other issues, and when it wasn’t looking, the annual deficits increased, and we now have national debt of $14.3 trillion.

In 2006, concern about the accumulating debt was expressed by then-Senator Barack Obama, when he voted against raising the debt ceiling:

“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure . . . a sign that the US government can’t pay its own bills . . . that we now depend on ongoing financial assistance from foreign countries to finance our government’s reckless fiscal policies. . . .

“Increasing America’s debt weakens us domestically and internationally . . . Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. . . Americans deserve better. . . .’’

Though the debt ceiling was raised that year, many Americans agreed the nation deserved better. Some ran for Congress on a pledge to fight to balance the budget and to control the national debt. Part of their campaign strategy was to take the Americans for Tax Reform pledge not to raise taxes. This was not just conservative dislike of tax increases: an uncontrolled national debt means a much higher tax burden on future generations.

But the issue is not whether to raise taxes now or to raise them later. It is how to address uncontrolled government spending.

For example, the balanced budget amendment would allow an exception for a declared war, not our recent years-long excursions. It would require a new transparency, with audit and analysis of domestic programs.

Obama was right in 2006 when he voted against raising the debt ceiling, but he was wrong earlier this year to file a budget with another giant deficit, and a need to increase the debt ceiling. Fortunately, the Tea Party Republicans and Blue Dog Democrats are moving in a different direction, noting that increasing debt to pay interest on debt is fiscal insanity. The House voted for the Ryan reform budget, and then voted this month not to raise the debt limit unless there are cuts in federal spending.

The Senate chose to dodge the debate this week with a vote to table the House bill. Having no budget and no plan, many senators appear poised to be replaced by Tea Party activists after the 2012 election.

Meanwhile, the flurry of activity continues. Everything should be on the table - except defaulting on our debt, which is unthinkable, and raising taxes as a short-term easy way out. We can responsibly cut the size of government now, or let the country fall apart later; these are the only choices.

Barbara Anderson is executive director of Citizens for Limited Taxation.