Under this set-up, Congress would still control the nation’s finances and the amount of debt it accrues through Congress’ control over taxes and spending. However, Speaker of the House John Boehner (R-OH) doesn’t seem to grasp the specifics of the matter, as he claimed during a press conference today that changing the process for raising the debt ceiling would amount to Congress giving up “the power of the purse”:
Do you think there is any chance that Senator Reid or then-Senator Obama would have done that? Zero. Congress is never going to give up our ability to control the purse. And the fact is that the debt limit ought to be used to bring fiscal sanity to Washington D.C.
The simple way to ensure that Congress does not add any more debt is to not pass bills that add any more debt. The debt ceiling does not restrict spending in any way; it merely ensures that the U.S. will actually pay for spending that Congress has already authorized. As the Government Accountability Office explained, “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.” “We’ve already voted on spending and revenue, and so the debt ceiling is just a confirmation of what we voted on,” said Sen. Max Baucus (D-MT)
But Boehner’s fundamental misunderstanding of the debt ceiling (or his willingness to publicly lie about what it does) did not stop him from taking it hostage and threatening to use it to impose his version of “fiscal sanity.” Last year’s debt ceiling debacle ultimately will cost taxpayers $18.9 billion due to the elevated interest rates on U.S. debt issued during that period.