Debt Ceiling Remedy: Abolish It With Gephardt or McConnell Rules
But what continues to fascinate and bewilder me is the one idea nobody seems to be discussing: Abolishing the debt ceiling. It threatens American credit-worthiness and, by extension, threatens to undermine both the U.S. and world economies. But there’s no particularly good reason for it, for reasons Brad Plumer reminds everybody today:
Back when Congress enacted the statutory debt limit in 1917, it was arguably a useful device for Congress to prevent the president from spending however much he pleased. But since 1974, Congress has created a formal budget process to control spending levels. The debt ceiling doesn’t do anything to determine the level of spending. It only allows the Treasury Department to pay for bills Congress has already racked up.
Abolishing the debt ceiling could take two forms. One would be to restore the old Gephardt Rule, named for former House Democratic Leader Richard Gephardt. Under that rule, the debt ceiling increased automatically when Congress passed its budget—a perfectly logical setup. The Republicans repealed the Gephardt rule in 2011, when they took power. Reinstating it could be part of whatever agreement ends the current impasse. The other possibility would be to enshrine, permanently, the arrangement Mitch McConnell developed for raising the debt ceiling last time. It became known as the McConnell rule. As Norman Ornstein, the American Enterprise Institute congressional scholar, recently explained:
The ‘McConnell Rule,’ as it was called, allowed the president unilaterally to extend the debt limit, while also providing for a congressional resolution of disapproval. If both houses of Congress disapproved of the president’s action, the resolution would be sent to the president. He could veto it—but it would take two-thirds of both houses of Congress to override his veto.