President Biden portrays House Republicans as hostage-takers for demanding that deficit savings accompany any debt limit increase. He maintains that “clean” debt limit bills reflect typical Washington practice and that attaching new savings would set a dangerous new precedent that endangers future debt limit legislation.
The president is entitled to his policy preference. But his position is the one that actually represents the departure from Washington norms and precedents.
For decades, the debt limit served as a legitimate tool for both Republicans and Democrats to address budget deficits. Debt limit “showdowns” were relatively rare because both sides recognized the need to address the underlying debt. Indeed, of the eight largest deficit-reduction laws since 1985, all eight were attached to debt limit bills.
This includes both Gramm-Rudman deficit cap laws in the 1980s, the 1990 Bush tax hikes, the 1993 Clinton tax hikes, the 1996 line-item veto law, the 1997 Balanced Budget Act, the 2010 PAYGO law, and the 2011 Budget Control Act. Every one of these deficit reforms was attached to a debt limit hike.
And these were not merely Republican initiatives. In 1993 and 2009, Democrats had control of the White House and Congress, and insisted on marrying their own debt limit increases to deficit-reduction legislation.
Most of these laws occurred in the 1980s and 1990s—when a 6 percent of GDP deficit was eliminated and turned into a budget surplus. Since then, both parties have gotten away from using the debt limit to address red ink—just as both parties bear responsibility for the past decade’s deficits. But the unsustainable debt means that all legislative avenues should again be open.
In fact, we have to go all the way back to 1983 to find major deficit-reduction legislation that was not tied to the debt limit. And that was Social Security legislation which was tied to another deadline—its trust fund fast approaching insolvency.
So those who argue that deficit negotiations should take place outside the debt limit must grapple with Washington’s four-decade refusal to address deficits outside of debt limit debates. Congress cannot even pass a budget, and those are mostly non-binding anyway.
Critics may not care about such deficit reduction, but they should acknowledge that clean debt limit hikes do not have the legitimacy of reflecting typical legislative practice.
Since 2008, only three of the 14 debt limit increases have been clean. And in fact, Democrats have been just as aggressive as Republicans in demanding the inclusion of priority legislation.
Under President Trump, congressional Democrats demanded and received $620 billion in added spending as part of various debt limit negotiations—and House Democrats still voted against the 2018 debt limit increase by a vote of 73 to 119. Yet few called those Democrats “hostage takers” toying with default in order to force through their agenda. The majority of House Democrats also voted for debt limit default in 2013 even under a Democratic president.
We can go back further. In three different years, President George W. Bush and a unified Republican Congress brought clean debt limit bills to the floor. Congressional Democrats voted against those bills at a 98.8 percent rate. Among the “default caucus” were then-Sens. Barack Obama and Joe Biden, and current Senate Majority Leader Chuck Schumer. (Relatedly, Schumer induced a government shutdown in 2018 when he demanded that unrelated immigration reforms be attached to routine government funding bills, making his current outrage over the potential interruption of government services quite hypocritical).
Later as president, Barack Obama came around. During the 2011 debt limit debate, he willingly engaged in bipartisan deficit-reduction negotiations that produced the Budget Control Act. His vice president, Joe Biden, was heavily involved in those negotiations.“…we have to go all the way back to 1983 to find major deficit-reduction legislation that was not tied to the debt limit.”
Perhaps President Biden and congressional Democrats have suddenly changed their minds on attaching other provisions to debt limit bills. Perhaps they believe the debt limit should not exist at all (although Democrats could have easily killed it unilaterally in 2021 by raising the debt limit by, say, $1 quadrillion, rather than just $2.8 trillion). That is a fair debate to have.
However, President Biden has no basis to claim that his new clean debt limit demand is any more legitimate than the Republican demand of deficit savings—especially when the president’s position more sharply deviates from 40 years of past precedents from both parties. The president is entitled to oppose the GOP spending cut demands as bad policy—just as Republicans are entitled to oppose the president’s unrestrained borrowing. Both sides will have to compromise, or be correctly blamed for any default.
The claim that Republicans are unilaterally forcing default because they will not raise the debt limit in the exact manner that uncompromising Democrats demand is just partisan bluster.
After all, the only legislation raising the debt limit that has been drafted, brought to the floor, and passed has been by House Republicans. Their bill—while aggressive—has the legitimacy of decades of bipartisan precedent. Now it is President Biden’s turn to make a counteroffer, and senate Democrats’ turn to try and pass their preferred path.
The public wants bipartisan negotiations. A new survey shows that 74 percent of voters—including 58 percent of Democrats—agree with the statement that “President Biden should agree to negotiations and try to find common ground around the debt ceiling, including some reductions in government spending.” Just 26 percent believe the president should resist negotiating and demand a clean debt ceiling hike.
President Biden claims his priority is to avoid a catastrophic default. Refusing to compromise one inch on the House-passed debt limit hike suggests otherwise.
Brian Riedl is a senior fellow at the Manhattan Institute, focusing on budget, tax, and economic policy. Previously, he worked for six years as chief economist to Senator Rob Portman (R-OH) and as staff director of the Senate Finance Subcommittee on Fiscal Responsibility and Economic Growth.