Like most small business owners, I have called my banker to request a loan to cover payroll and other expenses. Inevitably, the two questions he wanted answered were: “How will you repay the loan?” and “What will you do to avoid this problem in the future?” On the afternoon of Oct. 16, Congress ended the two week government shutdown with the passage of the Reid-McConnell deal. The agreement borrowed more money and reopened the government but failed to answer either of these questions.
My rule is to only support necessary increases in the debt ceiling if spending cuts and reforms are part of the package. An example of this approach was the bipartisan agreement in 2011 known as the Budget Control Act, which set strict discretionary spending caps for a decade while increasing the debt ceiling. The result has been two straight years of real spending reductions for the first time since World War II. By contrast, the Reid-McConnell deal allowed for an immediate borrowing of an additional quarter trillion dollars with zero reforms.
The debt ceiling is an artificial, self-imposed limit on our nation’s ability to borrow money. Some of our friends on the other side of the aisle suggest we should abolish it entirely. I believe it is important to have such a limit to act as check on spending and encourage reforms. However, families, businesses, and governments hit their real debt ceiling when they borrow more money than they are capable of repaying. America is coming dangerously close to that situation.
Rep. Alan Nunnelee