Michael Needham is CEO of Heritage Action for America, an activist group associated with the Heritage Foundation
Our nation's government is built upon a system of checks and balances. Fiscally, it also has alarm bells that go off when our spending is out of control. The debt limit is the loudest such alarm bell.
Since the Democrats recaptured Congress in 2006, our debt ceiling has been increased six times—from $8.965 trillion to the current $14.294 trillion. Each and every time the alarm bell has rung, it has been ignored and the type of fundamental changes necessary to get our nation back on track have not been implemented.
This year must be different.
Before we begin considering the events surrounding an increase in the debt ceiling, we must put one dangerous and politically motivated rumor to rest. The simple act of refusing to raise the debt ceiling would not cause America to default on its public debt.
The Obama administration is simply wrong when it says failure to raise the debt ceiling would "precipitate a default" and "have catastrophic economic consequences." If the government runs up against the debt ceiling, it will still be able to collect money and spend the money it collects. As my colleagues at the Heritage Foundation point out, the government will have more than enough revenue to pay interest on the debt.
Reaching the debt ceiling would not be catastrophic, nor would taking the time to couple raising the debt limit with common-sense policy changes aimed at getting our fiscal house in order. What would be catastrophic is a continuation of the status quo.
Now is not the time for rhetoric, strategic ambiguity, or empty promises. We must seize this opportunity to confront the enormous challenges facing our nation. It is an opportunity to reform entitlements, reduce discretionary spending, and correct a legislative process that leads to ever more government spending. [Read more about the deficit and the national debt.]
For the first time in our nation's history, spending on entitlements (i.e., Medicaid, Medicare, and Social Security) has outpaced government revenues. In other words, we could slash every discretionary spending program, including defense, and still run a budget deficit. We cannot be serious about the debt ceiling until we're serious about addressing these budget behemoths. And even though entitlements are the proverbial elephant in the room, Congress must also address the rapid rise in discretionary spending. Since 2001, discretionary spending has increased by 60 percent. My Heritage Foundation colleagues have identified more than $340 billion in potential spending reductions, all of which should be on the table during the debt ceiling debate.
Pursuing the right policy is important, but we also need to change rules to lock in those policy gains. It is essential to limit the cause of the problem, which is spending. By capping spending, we ensure future Congresses will not relapse into a reckless spending addiction.
It is almost impossible to understate the scope of the problem. By the end of the year, our national debt will exceed our gross domestic product. As we've seen with Greece, Ireland, and now Portugal, this is not trivial. Simply put, a debt-laden country cannot thrive.
Congress must insist on immediate and substantive spending reductions and reforms. It must focus on entitlement spending, discretionary spending, and the way Washington spends money. Those issues must be addressed either prior to, or in conjunction with, any increase in the debt ceiling. Anything less will be yet another blank check that our children are forced to pay.
See the other side of the debate: Read an op-ed by William Gale of the Brookings Institution on why it is necessary to raise the debt ceiling.