October 25, 2014

Debt Limit Increase Tied to Spending Cuts

  • The national debt has grown significantly in recent years due to rising annual deficits. A deficit occurs in any year the government spends more...

Several dozen House members told President Obama last week that they supported Speaker John Boehner’s position that the next increase in the federal debt limit should be coupled with spending “cuts and reforms” of a greater amount. 

“We agree with the Speaker that tying the debt limit increase to common-sense spending reforms is a necessary first step to solving the nation’s fiscal imbalance,” the 56 lawmakers said in a letter to Obama.  Boehner discussed his position in a speech last month.

The government expects to approach its statutory debt limit late this year. Democrats and Republicans, however, continue to disagree over what types of spending cuts should be made. In addition, Obama and others in his party have called for some additional government revenue to help close projected fiscal gaps.

The unpleasant reality is that Washington will again need to increase the debt limit to avoid default.  Ideally, such an increase would be accompanied by a broad package of fiscal reforms on which both parties can agree. It would be irresponsible, however, for any elected officials to try to hold a debt limit increase hostage to a one-sided agenda.