The debt limit is a universally maligned policy that artificially creates funding crisis. Instead of allowing markets to restrain government borrowing by charging higher interest rates, the debt limit restricts the principal government can borrow. This creates occasional shutdowns, including the current shut down. There is one overlooked positive aspect of the debt limit: it constrains the dead hand control of prior Congresses on new Congresses. This is demonstrated by the current impasse.
President Obama argues that Congress’ job is to fund programs it enacted, including Obamacare. Implied in this argument is that if Congress agreed to create a program and appropriated funds for that program, then it is a duty for a new Congress to secure the funds even if they need to raise the debt limit. However, Obama obfuscates the issue by equivocating on Congress. The Congress that passed Obamacare is not the Congress attempting to defund Obamacare. Therefore, under Obama’s logic prior Congress’ funding plans (but not laws) obligate future Congresses to raise the debt limit to pay for prior Congresses promises. Obama’s failure to differentiate between the two Congresses embraces a weak ethos of: one vote, one person, one time. This is because institutionally old Congresses already exhibit substantial sway over current congresses.
The way Congressional default rules are set up and because of public choice, it is very difficult to invalidate laws once enacted – even if the law is bad policy. The debt limit provides a procedural mechanism whereby the current Congress can regain some of its authority against the older Congresses. This is good because while we want stability, older in time does not necessarily mean superior in wisdom nor should it mean in the policy context as first in right.
Now, the debt limit is per se a dead hand control. Moreover, it is a blunt tool for dealing with a problem that requires precision. Finally, Congress rarely uses this tool. Therefore, I do not support the debt limit even without considering the pecuniary costs associated with the debt limit policy. Nevertheless, there is a benefit to the debt limit. That anti-dead hand benefit frames the issues surrounding the debt limit. Namely, just because one Congress enacted a law does not – contrary to President Obama’s claim – obligate morally or legally a future Congress to fund that law. Further, the anti-dead hand benefit should serve as a normative goal: how can new Congresses assert their policies goals while still maintaining some degree of settled expectations.
*Isaiah Hunter is a J.D. Candidate at New York University School of Law, class of 2014, and is Senior Articles Editor of the Journal of Law & Liberty. Mr. Hunter is the author of the Column "Hunter's Point."