Misleading America About the Debt Limit

House Republicans Try to Shift Responsibility for a Crisis They Created

Seth Hanlon parses House Republican rhetoric about the causes and nature of the debt limit crisis to demonstrate who’s really at fault.

Speaker of the House of Representatives John Boehner (R-OH) and House Republicans are employing a new talking point to shift blame and responsibility for the present debt limit crisis onto President Barack Obama. Addressing the nation on Monday night, Boehner accused the president of asking for a “blank check” from Congress in the form of a debt limit increase.

In fact, past Congresses, and this one, have already ordered the president to write millions of specific checks to everyone from Social Security recipients to veterans to defense contractors—and all President Obama is asking for is the cash to make sure those checks don’t bounce.

For months now, President Obama urged Congress to raise the statutory debt limit to prevent an unprecedented U.S. government default and allow the government to continue to function. But without a compromise, the debt limit is fast approaching. And we are now potentially only days away from the moment when the federal Treasury cannot meet its ongoing obligations because it is legally barred from raising cash in the debt markets.

But that’s not how Speaker Boehner chose to tell it. Referring to President Obama’s call for a debt limit increase, Boehner said: “The sad truth is that the president wanted a blank check six months ago, and he wants a blank check today. That is just not going to happen.” The Washington Post’s Adam Serwer tells it like it is: “This is a straight-up lie. Not the everyday, casual fudging that politicians do, but a straight up lie.”

The “blank check” talking point is literally untrue, of course, but it is also a deceptive, dishonest metaphor. Here’s why:

Increasing the debt limit does not authorize the president or executive branch to spend money

The “blank check” imagery suggests that President Obama is given discretion over how much public money to spend. But to state what should be obvious, only Congress has the “power of the purse” under Article I of the Constitution, subject to presidential veto. The president is only authorized to spend amounts that Congress has appropriated (indeed he is legally obligated to spend those amounts). The debt limit does not affect Congress’s primary responsibility over spending and revenue policies.

Raising the debt limit merely allows the president to make good on commitments already made by Congress

The “blank check” metaphor misleads Americans about what the debt limit really is. The debt limit is a cap on the face value of outstanding government debt securities. The reason Treasury issues those securities is to raise cash to pay for the things that Congress has already committed to pay for. As Congress’s Government Accountability Office explains:

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. . . . The debt limit does not restrict Congress’ ability to enact spending and revenue legislation that affect the level of debt or otherwise constrain fiscal policy . . . .

The spending and revenue policies that determine the level of debt—driving it to the point where it will soon hit the statutory limit—have already been enacted by Congress. And the biggest drivers of the debt were enacted before President Obama took office. (For the numbers, see here, here, and here.)

These policies included the revenue-depleting tax cuts of 2001 and 2003, the debt-financed Iraq and Afghanistan wars, and the wasteful and unpaid-for prescription drug bill of 2003. Speaker Boehner supported and voted for every one of them.

Setting the record straight

The notion that President Obama is asking for a blank check because he believes the U.S. Treasury should meet obligations that Congress has already incurred is false on every level. The president is not asking for a blank check. He is, in essence, urging Congress to prevent the U.S. Treasury from writing bad checks. He believes the federal government should not promise to pay certain amounts to bondholders, Social Security beneficiaries, active duty military, veterans, government vendors, and others, and then fail to make good on those promises.

That shouldn’t be controversial. Indeed, Congress has raised the debt limit 74 times in the last half-century, whenever the government’s cash flow needs required it. That’s why the full faith and credit and the AAA rating of the United States are still intact. Washington is in crisis mode right now not because of any unusual request by President Obama, but because House Republicans have decided to threaten an unprecedented default to force policy concessions, and have continued to refuse to compromise.

Speaker Boehner’s misleading rhetoric about why we are in this crisis undermines the good faith needed for a compromise to end the crisis. Americans would be better served if the speaker spoke more honestly about the debt limit.

Seth Hanlon is Director of Fiscal Reform for the Doing What Works project at the Center for American Progress.

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Seth Hanlon

Former Acting Vice President, Economy