Debt Ceiling Shouldn't Be a Pawn in Deficit Debate
Jun 17, 2011
By Amit Jain
The federal debt ceiling has become a pawn in the debate over how to reduce the federal deficit. The Treasury Department has said Congress must vote to raise the debt ceiling by Aug. 2 so the government can continue to fulfill its obligations, but some lawmakers are using this deadline to push for draconian spending cuts to domestic programs that would do little to address the nation's long-term structural deficit.
Earlier this week, the debt ceiling and the deficit were topics of discussion during a conference of the Committee for a Responsible Federal Budget. In an opening statement, Federal Reserve Chairman Ben Bernanke said the debt ceiling vote is "the wrong tool" for this debate. Bernanke is right. Using the debt ceiling as a bargaining chip would disproportionately harm low-income Americans.
At the conference, an ideologically diverse array of speakers agreed that the August deadline must be met. Chairman Bernanke said that even if the Treasury prioritized interest rate payments to avoid a default, it would have to withhold outlays for support programs such as Social Security, Medicare, and Medicaid. Millions of Americans count on these supports to make ends meet and keep their families in good health.
Former Republican Sen. George Voinovich joined many in both parties to speak forcefully in support of raising the debt ceiling. He said his conscience would not let him oppose such a critically important action.
Holding the debt ceiling vote hostage to budget cuts will also likely result in drastic cuts to domestic, non-discretionary programs, as proposed in the FY 2012 House budget resolution. The budget, which passed in the House in April, proposed draconian cuts to poverty-alleviating, opportunity-promoting programs such as Pell grants, workforce development and early education. It also proposed converting Medicaid and the Supplemental Nutrition Assistance Program (SNAP) into block grants, which would severely erode funding for these programs. These measures would be detrimental even in good times, but in this economic climate, they will also deeply harm the low-income families who have been most severely affected by the economic downturn.