Federal spending: Why do so many politicians think federal appropriations take precedence over spending limitations such as the debt ceiling?
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As I understand federal law there are only two or maybe three levels of precedence when laws conflict with each other. The US Constitution is the supreme law of the land and wins all conflicts. Possibly, there is a difference between mandatory spending laws and discretionary spending laws. However, it seems that many politicians feel appropriations (spending authorizations) take place over spending limitations. Put differently, the debt ceiling is treated as a subordinate law to spending laws so that congressional appropriations are more important than borrowing limits. Apparently, the politicians seem to think the debt ceiling MUST be increased to prevent default when it seems obvious that the same defaults could be avoided by reducing spending to meet the debt ceiling. Managing federal spending, which accounts for nearly 1/4 of all spending that takes place in the USA, is a huge and difficult task. It seems to me just as important that those politicians who want to be in control of the spending (in the executive branch) need to consider the limits to spending just as seriously as the authority to spend.
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Answer:
Cynically? Politicians are directly invested in appropriations. Those spending bills contain billions in federal projects, almost all of which will benefit some Member's district. The is, in that view, an inconvenient obstacle. More realistically? There's a genuine Constitutional question about what to do when laws conflict. Tens of thousands of are on the books. What do you do when they conflict? As I understand it, there's a lot of Constitutional argument over resolving those conflicts, particularly when laws infringe on enumerated powers that span the branches of government. So in this case: what if a previous had passed a debt ceiling, but this Congress passed spending bills that would result in the Administration breaching it? Since no Congress may bind a future Congress - that is, barring an Amendment to the Constitution - wouldn't the more recent law be prioritized? Trouble is, that sets a dangerous precedent. Any indirect effects on prior laws made by new laws could result in those old laws being set aside at the executive's discretion, and that would be a terrible idea. The executive shouldn't be deciding what laws are going to be enforced. So this is why you're hearing all this discussion about the "trillion dollar coin," or the President decreeing that the ("The validity of the public debt of the United States, authorized by law ... shall not be questioned,") renders the debt limit itself unconstitutional and invalid. IANAL, however, so I can't opine on that interpretation.
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Other answers
The debt ceiling is not a spending limitation. It's a borrowing limitation. This is an important distinction. Congress can pay for things without borrowing. It's the simplest thing in the world: just increase revenue. Congress's power to tax is basically unlimited, after all. So it makes sense to have two separate questions: How much money shall we spend? Where shall we get that money? If you're asking why Congress continues to spend more and more when they know damn well that money will be borrowed, it's because they care more about implementing those programs than lowering the national debt.
Claire J. Vannette
You are correct overall: the government could avoid default by cutting spending instead of raising the debt ceiling. But there are a lot of issues with that in practice. First, the problem with the debt limit is that it lets Congress talk out of both sides of its collective mouth. The government's finances are 100% the responsibility of Congress. Congress appropriates money for programs and services, and creates entitlement programs. Executive Branch is legally obligated to carry these out. Then Congress looks surprised and shocked when the resulting deficits result in Treasury needing to borrow money. It's unfair of Congress to tell the Executive Branch to spend money on various programs and services, then say that the Executive Branch can't borrow the money needed to pay those bills. But that's exactly what Congress did. That's why you heard the President and others saying that the debt limit must be raised. The Executive Branch can't be in the position of trying to decide which bills Congress really means them to pay, and which Congress means them to ignore. When Treasury gets close to running out of money, raising the debt ceiling really is the only viable answer; it's too late for spending cuts. In the longer term, Congress could exercise fiscal discipline, balancing the budget so that they didn't need to raise the debt ceiling. It does happen once in a great while. Another complication: the debt ceiling is not indexed to inflation or GDP. Economists never talk about debt in absolute terms. They talk about the ratio of debt to GDP, or similar measures, because that's what's important in considering how much debt a country can reasonably issue. But the debt ceiling is set in absolute, nominal dollars. So we could theoretically have a situation where the debt/GDP ratio - or even the total debt in real, inflation-adjusted dollars - was actually shrinking, but we still hit the debt ceiling because the debt was going up in absolute dollars. Yet another complication: the percentage of the federal budget that's discretionary is shrinking; a lot of our spending is committed to in advance, either through entitlements or to service existing debt. Without changes to entitlements, Congress could keep cutting discretionary spending until there was no government left at all (no military, no FBI, no national parks, none of it), and eventually we would hit the debt ceiling anyway just due to growth in entitlement spending, interest on the existing debt, and inflation. Of course, the entire problem was created by past Congresses spending money and making promises, but knowing that that doesn't provide the current Congress any easy answers.
Mark Binfield
Why do so many politicians think federal appropriations take precedence over spending limitations such as the debt ceiling? Because they do. Once Congress appropriates money and spends it, since so much of that money is borrowed, the United States is on the hook for that money. It is horrifyingly bad governance to then, six months or a year later, hold a vote on whether or not to pay the bill. The distinction is sophistry. In 18th and 19th century England duels were fought over this kind of thing. A gentleman paid his debts of honor. The United States of America needs to admit that appropriations, like elections, have consequences, and just butch up and pay the bills.
Stephanie Vardavas
The debt ceiling isn't a law that commands anybody to do something or even tells someone not to do something. It is a restriction on a power inherent in the executive branch, to spend money that Congress has already appropriated. It is saying in effect , we will let you buy that car but come to us before using the family credit card to do it. Because expenditures are authorized by separate legislation, the debt ceiling does not actually restrict deficits. In effect, it can only restrain the Treasury from paying for expenditures that have already been incurred. Thus, I don't see a conflict of laws issue as both commands (the duty to spend and the duty to seek Congressional approval before incurring more debt to pay for legal expenditures) can be followed together. Until 1917, there was no debt limit ceiling in the United States. The Congress either authorized specific loans or allowed the Treasury to issue certain debt instruments and individual debt issues for specific purposes and the executive was generally free to incur debt to meet legal appropriations by Congress. Most experts agree that in the event of a default on the debt ceiling, the President could continue to make payments on the debt to avoid defaulting on those obligations but would have to forgo at least some non-debt obligations. Thus calling the crises a default on debt is a bit inaccurate. The debt limit does not control or limit the ability of the federal government to run deficits or incur obligations. Rather, it is a limit on the ability to pay obligations already incurred. However the market would likely treat it very similarly and thus the debate may be more academic than real. Earlier reports to Congress from other experts have repeatedly said that the debt limit is an ineffective means to restrain the growth of debt. The debt ceiling originally served a important purpose when introduced because, at that time, the President had stronger authority to borrow and spend as he pleased. However, after the enactment of the Budget Control and Impoundment Act of 1974, Congress began passing comprehensive budget resolutions that specify exactly how much money the government can spend. Thus the debt ceiling really is an obsolete purpose that serves no purpose and actually is dangerous (kind of like the appendix or gall bladder of our government). Query why the debt limit should not in fact be deemed to be automatically raised when Congress passes a budget? This was the rule in the House from 1979 to 1995. A January 2013 poll of a panel of highly regarded economists found that 84% agreed or strongly agreed that, since Congress already approves spending and taxation, "a separate debt ceiling that has to be increased periodically creates unneeded uncertainty and can potentially lead to worse fiscal outcomes." Of course it serves a political purpose in that it allows for grandstanding and showboating by politicians from both major parties. Personally though, I look forward to the day when this outdated and harmful provision is stricken from law or greatly reformed and/or modified.
Nicholas Moyne
By the time you get to billions, only Bill Gates has any understanding of what that means. If you asked college students at good Universities outside the US to write comparative studies covering the careers of Berlusconi, Francisco Franco, Stalin and House Republicans, they would find that objectively Berlusconi and the others had more of a sense of statesmanship. In 2008 even the most conservative Republican should have learned the practical catastrophic consequences of selfishness, greed, and political irresponsibility. In most developing countries, a catastrophe is something caused by nature, not by a small group of small-time politicians.
Fred Landis
There is one aspect of government spending that is not apparent to average citizens but completely obvious to anyone who works in government finance (as I did when on active duty in the USAF). It is that the government is so huge and the amount of money it spends is so immense it is impossible to even keep track of it let alone control it. Government finance works completely differently from personal or even business finance. The government doesn't authorize spending in dollar amounts and check bank balances to see there is enough money to pay its bills. Instead it is all done with formulas and approximations. Money is appropriated based on the rules for spending rather than on the amount. There is some attempt to claim the amount of money appropriated is fixed but that is not really true. It is all approximations based on the rules. This doesn't make intuitive sense to normal people but it is the only way it can be done for such a huge operation. The federal government spends somewhere around 20 percent of all the money spent in the country every minute of every day. This is millions of payments per minute. Just the lag time from the time when a payment is authorized until the check or electronic payment is made and the payment cleared through the federal reserve bank that clears that particular payment is enough to make it impossible to even guess at how much money the government has actually spent in any given minute. It is not a big problem most of the time since the government also has the power to create money whenever it needs it. It becomes a problem when something like the debt ceiling is reached. Of course this is another approximation that may or may not be accurate. The treasury can play games to make the actual debt limit determination vary by months of the huge government spending. So my answer to this question - of why appropriations take precedence over the debt limit is simply because they can deal with appropriations but can't keep track of spending. The government spending is just too big to track.
Paul Mulwitz
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