WASHINGTON-In March 2006 a freshman U.S. senator came to the Senate chamber and urged his colleagues to oppose efforts to increase the nation's debt ceiling to $9 trillion.
Calling the need to raise the nation's borrowing power a "sign of leadership failure," the senator criticized the nation's inability to pay its own bills and its dependence on foreign assistance. He warned that more debt "weakens us" and shifts "the burden of bad choices today onto the backs of our children and grandchildren."
The name of that senator: Barack Obama.
Now President Obama is asking Congress to do what he once opposed: to again raise the government's debt ceiling. The current borrowing limit of $14.3 trillion is 64 percent higher than it was five years ago. Yet the federal government is scheduled to hit that ceiling sometime by August.
If an increase is granted, it will mark the 11th time in the past decade that Congress has upped the federal government's credit card limit.
Obama recently said his 2006 vote against raising the debt limit was a mistake. But today a new crop of freshman lawmakers on Capitol Hill are pledging to oppose any debt limit increase unless it is tied to spending controls. "With the debt ceiling debate we have an opportunity to change the way Washington works," said U.S. Rep. Marlin Stutzman, R-Ind. "The spending habits have got to change in Washington, and the way you do that is to start cutting up credit cards."
Stutzman, as a fourth-generation farmer, knows something about controlling spending. He runs a 4,000-acre farm with his father and says surviving in the unpredictable world of agriculture requires discipline on both sides of the ledger. Elected to the Indiana statehouse in 2002 when he was just 26, Stutzman helped a Republican-led legislature overcome the state's billion-dollar deficit by reducing spending.
Now a 34-year-old congressman on the House Budget Committee, Stutzman said he has been frustrated by the lack of urgency in Congress over the nation's debt. "I've seen these huge numbers thrown around like they are insignificant," he said, "and we are giving these huge amounts to bureaucrats and government agencies all across the country."
Both political parties are to blame. In 1980, the national debt approached $1 trillion. For the last 30 years, under Republican and Democratic leadership in both the White House and Congress, the nation has accumulated more than $13 trillion worth of additional debt. This is largely due to wars, bailouts, and growing entitlement programs.
Under Obama's spending plan the debt ceiling would have to be raised by $2.2 trillion to get through next year. The GOP budget plan fares slightly better, requiring a debt ceiling increase of $1.9 trillion. Lawmakers have routinely signed off on the increases: The debt ceiling has been raised 74 times since 1962. Congress has never failed to raise it since the initial debt limit was set in 1917.
But Stutzman is not the only new lawmaker who sees this summer's debt ceiling debate as a rare chance to force spending changes that go beyond gimmicks and press releases. "As a Christian I look at this as morally reprehensible," said Rep. James Lankford, R-Okla. "Proverbs is pretty clear, a righteous man leaves an inheritance to his children's children. But this is the first generation in American history saying, 'Times are tough. I think I will make it easier on me by making it tougher on my children.'"
Lankford, who directed one of the nation's largest Christian camps before taking federal office, said this freshman class came to Congress determined to halt the practice of overpromising when it comes to government services.
But most of what the Republican House has passed this year to impose fiscal discipline has been ignored or rejected by the Senate.
That can't be the case with the debt ceiling debate. The Senate will have to take that up. That is why conservative lawmakers will resist any efforts to pass a bill that increases the debt limit alone. "It is not because we are trying to hold America hostage," Lankford said. "It is because we are trying to get the Senate to actually come to the table and talk."
The options conservatives want on the table are many: Some favor switching to a two-year budgeting cycle for the federal government. Under this plan, lawmakers focus on spending one year and oversight the next year.
Others are touting a balanced budget amendment. Every state but Vermont currently requires a balance between revenue and spending for its government. But such an amendment could be a tough sale: It would require approval by two-thirds of both the House and Senate and three-fourths of the states.
Bipartisan support is growing for imposing strict caps on federal spending. Such caps would kick in automatically across the government when federal spending reaches certain predetermined levels. A phased-in federal spending cap of 20.6 percent of the nation's economy, authored by a Senate Republican and a Senate Democrat, would save nearly $8 trillion within a decade.
While conservatives continue internal debates on what to attach to a debt-ceiling vote, others warn that using the nation's debt as leverage could lead to an economic catastrophe. The United States has never defaulted on its debt. Some fear that doing so now would cause a spike in interest rates, further undermine global confidence in the U.S. dollar, and lead to higher inflation.
Former Treasury Secretary Paul O'Neill, who served under George W. Bush, said on April 27 that those holding a debt ceiling increase hostage are "our versions of al-Qaeda terrorists."
But Lankford said a rigorous debt ceiling debate would not create any more trouble than the economic turmoil already caused by $14 trillion worth of debt. The Standard & Poor's rating agency last month downgraded the United States' long-term credit rating from "stable" to "negative." Congress, Lankford said, needs to signal to its creditors that the nation is serious about its debts.
What's not debatable: American finances are on an unsustainable course. Will the summer's ceiling dispute be a watershed moment for this Congress? Sen. Jim DeMint, R-S.C., has promised to "tie the Senate in knots" over the debt problem.
Short of slashing spending by 40 percent (not going to happen), the debt ceiling limit will have to be raised. But a postponement in raising the limit wouldn't necessarily lead to default right away: Revenues would still come to the Treasury, and the government could make paying creditors a high priority. Some analysts have also suggested that the government could sell some of its assets to stave off a default. Meanwhile, only 1 in 10 voters in a recent survey supported raising the ceiling without preconditions, giving conservatives hope that the time is right for a spending debate.
"We've developed this idea that the government is going to be the final security of our future," said Rep. Tim Huelskamp, R-Kan., another freshman on the Budget Committee. "And a government that can't pay its bills is a not a great place to put your faith."
Nothing more than ceilings
The debt ceiling has been increased nearly 100 times since it was established in 1917 and set at $11.5 billion. During the 1980s, it increased from less than $1 trillion to nearly $3 trillion. The debt ceiling limit doubled during the 1990s and doubled again in the 2000s to more than $12 trillion. In February 2010, lawmakers raised it by $1.9 trillion, the largest annual dollar increase, to the current level of $14.294 trillion.
Debt as a percentage of GDP:
2001 ... 56.6%
2002 ... 59.0%
2003 ... 61.8%
2004 ... 63.2%
2005 ... 63.6%
2006 ... 64.0%
2007 ... 64.8%
2008 ... 69.6%
2009 ... 84.4%
2010 ... 93.4%
2011 ... 96.8%
Sources: Committee for a Responsible Federal Budget; White House Office of Management and Budget; Heritage Foundation; Congressional Research Service