Breaking the ‘Groundhog Day’ debt-ceiling cycle
Here's a suggestion for lawmakers battling over the debt ceiling: Take a moment to watch "Groundhog Day." The 1993 comedy holds some lessons that can help them escape Washington's vicious spending and debt cycle.
In the movie, self-centered meteorologist Phil Connors awakens day after day to find it is always Groundhog Day — the very same Groundhog Day he hated the first time around. Recognizing he is stuck reliving it again and again, he goes through several rounds of self-destructive behavior, only to repeat the vicious cycle.
Connors is unable to break out of the time loop until he recognizes it as an opportunity to re-examine his life and priorities. His complete personal transformation finally breaks the Groundhog Day cycle.
Lawmakers can learn much from this story. The debt limit offers lawmakers a similarly painful experience. It confronts them time and again with the consequences of their profligate spending decisions: a massive national debt.
Nearing $17 trillion, the national debt now tallies nearly $140,000 per American household. That's a little less than the average mortgage debt in America — only taxpayers have no house to show for it.
Yet, the president and Congress can't seem to break out of the spending and debt cycle. They have raised the debt limit seven times since President Obama entered the Oval Office. As a result, the per-household tab for the debt has soared by $43,000 in just the last four years.
It seems that no increase in the debt limit, no matter how large, is ever enough. In very short order, Washington always finds itself in the very same spot. Short on cash to cover all the spending that's on the books, Congress and the president engage in a fierce political battle, only to — eventually — raise the debt ceiling and start the cycle all over again.
The cycle goes like this: Too much spending results in budget deficits. The deficits add to the national debt. The debt runs up against its statutory limit. Treasury borrows from accounts not subject to the limit for a little while and demands more borrowing authority. A political battle ensues leading right up to the day when Treasury says it cannot pay all obligations in full and on time.
Eventually, Congress and the president raise the debt limit. Sometimes they just raise it. Other times, lawmakers try to instill some fiscal discipline — tying the debt limit increase to a budget package that cuts spending or includes a deficit or spending enforcement mechanism. The one constant, however, is that the ceiling is raised, and the cycle continues.
In 2011, Congress passed the Budget Control Act, which cut spending by $2.1 trillion in exchange for an overall increase in the debt limit of the same amount. The problem: The spending cuts phase in over 10 years, while the new debt ceiling was hit in less than a year and a half.
Lawmakers are already wrangling over how to undo the BCA's modest spending cuts. Not only is no increase in the debt limit ever enough, taxpayers can hardly count on spending reduction plans that are too easily undone.
Cutting mandatory spending, the kind that grows on autopilot with few deadlines allowing for reconsideration, makes for a spending cut that sticks. And like the gift that keeps on giving, savings from smart reforms to programs like Social Security, Medicare and Medicaid will grow bigger over time.
Lawmakers can break out of the spending and debt cycle by putting the budget on a path to balance. That path entails cuts in mandatory as well as discretionary spending.
In "Groundhog Day," Phil Connors asks, "What would you do if you were stuck in one place and every day was exactly the same, and nothing that you did mattered?" Connors was able break his Groundhog Day cycle when he re-examined his life and changed his approach to problems. Lawmakers could do the same if only they were willing.
- Romina Boccia is the Grover M. Hermann Fellow in federal budgetary affairs at the Heritage Foundation.
Originally appeared in The New York Times.