Then overzealous Republicans went and broke it again
The current debt ceiling fracas stems from one thing, and it's not spending. It's the pointless, silly, and potentially very costly, two-step process by which the United States, and no other country, goes about budgeting and spending money. First, Congress passes a budget resolution that determines how much will be spent. Then it raises the debt ceiling to accommodate that spending. The fight now is being driven by Republicans, and some Democrats, who don't want to do the second part, even though the spending decisions have already been made. I've likened the issue to having dinner in a restaurant and then haggling over the check. But given the tenor of our politics, a more apt analogy might be bulimia. First dinner, then...
Well, anyway. The obvious question is, why have two steps? Why not just agree that the debt ceiling will rise to accommodate what Congress agrees to spend? After all, decisions about spending should be hashed out in the budget. That's the point of having them. Breaking the process into two steps only creates the possibility of default, which would harm everyone. (Just ask Wall Street.)
In 1979, this very thought occurred to a young congressman named Richard Gephardt, who proceeded to do something about it. "I had just gotten to Congress," Gephardt explained to me recently. "Tip O'Neill, the legendary speaker, gave me the assignment to pass the debt ceiling [increase]." Back then, the ceiling was below $1 trillion, a fraction of the $14.3 trillion it is today. But Gephardt's job was difficult and lousy nonetheless. "We [Democrats] were in charge of Congress, but nobody ever wanted to vote for it. Republicans wouldn't give us votes, so it was our responsibility. Every time it came up I had to go to every member and seek their vote. It was painful and difficult and, I thought, unnecessary. I'd say to members, 'Did you vote for the appropriations bill? The defense bill? The highway bill?' They'd all say yes. And I'd say, 'Well, then you gotta pay the bill. If you didn't mean it, don't vote for it. Then you wont have to pay for it.'"
Gephardt realized that the easiest way to fix the problem and impose some rationality on the process, was to do away with the second vote. He consulted the parliamentarian. "I asked if there was a way that when we pass the budget [the debt ceiling] can be deemed 'raised' to accommodate the budget people are voting for," Gephardt said. "He said, 'Yeah, we think we can work that out.'"
Thus was born the "Gephardt rule." For a period thereafter, the adoption of the conference report on the budget resolution would trigger the Gephardt rule and "deem to have passed" legislation raising the debt limit to accommodate the spending and revenue levels approved in the budget. Presto! Problem solved.
It didn't last. When Republicans took back the House in 1995, they brought back the second vote as a way to pressure members on spending. "They actually wavered back and forth," Gephardt recalled. "Sometimes they'd use the budget procedure to wave it through, and then other times they'd require the vote. It's silly because it's just grandstanding. David Obey used to call it posing for holy pictures. It's a facade; it's not real. If you're real, you vote for budgetary and spending decisions that would balance the budget. If that's what you want, that's what you should do. That's the operative vote. That's where the money is spent."
I asked if he thought the current threats to default went beyond just posing for holy pictures. "I think the threats are more credible now," he told me. "It's much different than it was the '90s, when you had a Democratic president and Republicans controlling both houses. So they really did have the responsibility of [raising the ceiling]. It could be clearly laid at their doorstep. Now, Republicans can say that anything they'd pass in the House couldn't get through the Democratic Senate. You have a lot of finger pointing that people can never quite understand."
Gephardt had another reason for worrying that a default could be more likely, and it went back to the process of requiring split votes to raise the ceiling: "You've got 80 or 90 new Republican members who don't want to vote for this, and who can say to their leadership, 'Hey, I wasn't here when the money was spent. I came here to solve the problem, and you're not solving the problem. So I'm not going to raise the debt ceiling.'"
Drop-down image credit: Reuters