The Democrats knew when they took over Congress in January that sometime during the year they would have to raise the ceiling on the national debt. After all, raising the limit, which allows the Treasury to keep borrowing, was done four times in five years under President Bush and the Republicans.
And, when the Democrats were the minority, lifting the debt limit was the occasion for good political fun, noting that when Bush took office the national debt was $5.6 trillion and declining. Now, however, thanks to steep tax cuts and profligate federal spending, the national debt was soaring. The Democrats enjoyed pointing this out.
The debt is now bumping up against the $9 trillion limit, and Treasury Secretary Henry Paulson warned this week that the ceiling should be raised “as soon as possible” lest the federal government be unable to pay its bills.
Congress likes to stall around on this unpleasant task, so the Treasury has a variety of ways to buy a limited amount of time by juggling various accounts. If any Congress would be so reckless and irresponsible — and, mercifully, none has — to exceed that time, the U.S. government would go into technical default.
No one expects that to happen, but just the fact of the Treasury having to engage in a financial juggling act, Paulson points out, creates uncertainty in the financial markets and increases borrowing costs to the government.
The Democrats have debated a variety of ways of cloaking a vote to increase the debt, but, really, as the majority party they have no choice but to grit their teeth, endure the jeers of the Republicans and vote to keep on borrowing. And they should do it soon.