Guest columnist Keith Peterson: There are ways to end the debt ceiling brinksmanship

According to Treasury Secretary Janet Yellen, the U.S. will hit its debt limit this week. Yellon can take what are known as "extraordinary measures" to keep the U.S. solvent, but in a few months, the U.S. will face the danger of defaulting on its debts should the debt ceiling not be raised by the Congress.

Raising the debt limit used to be routine. Since World War II, it has been modified roughly 100 times. The last time was in 2021 when Democrats controlled both houses of Congress. Things are different now.

During the Obama administration, Republican brinksmanship on the debt ceiling vote forced Obama to agree to spending cuts, but the instability caused the U.S. credit rating to be lowered for the first time in history.

Currently, these are the numbers. The U.S. is allowed to service just over $31 trillion in debt. The federal government's obligations are slated to exceed that number this week. Last fiscal year, the U.S. federal budget was $6.27 trillion and the deficit was $1.38 trillion. In the first third of this fiscal year, the government has run a deficit of about $440 billion, so on track to run a similar deficit.

Rising interest rates, retiring baby boomers, a possible recession can exacerbate the budget picture. America's GDP is about $25 trillion, so our debt is more than 100 percent of annual economic output. Anyone who has ever had a mortgage on a house knows the feeling.

The last time the U.S. had a budget surplus was the last four years of the Clinton administration when federal spending fell, taxes were raised, and the dot.com bubble inflated revenues. The national debt was reduced in those years.

Now, there is an awful lot of sturm and drang since the drama over the vote to make Kevin McCarthy speaker of the House. What did McCarthy promise? Will conservative lawmakers go too far over the vote to raise the debt ceiling, seeking cuts in the federal budget that will never be accepted by the Senate or the president?

Using a piece of legislation that absolutely has to pass as a vehicle to get concessions that ordinarily would not have the votes to pass is a tactic we have seen too often. It does not have to be this way. Economists don't believe there should be votes like this at all. The Treasury secretary should be able to do what is necessary to insure the full faith and credit of the U.S.

It is also possible that moderate Republicans who think this kind of brinksmanship is dangerous (and it is) would team with Democrats to gather 218 signatures on a discharge petition that would bring the debt ceiling bill to the floor and pass it with a bipartisan vote. That could cause angry conservatives to end McCarthy's speakership.

A number of years ago, I wrote a piece about the federal budget noting that the government - in the most simple terms - does five things. It pays the interest on the debt. It provides pensions. It provides health care. It provides security. Finally, in a category I called "everything else," it subsidizes farmers, housing, students, small businesses, highways, national parks and a host of other things. The big tickets (where the real money is) are Social Security, Medicare/Medicaid and defense.

We can reduce deficits by enforcing current tax laws (that would cut the current deficit in half), by raising taxes, cutting spending, increasing immigration or making investments that stimulate growth. Conservatives who want significant cuts in federal spending need to be honest about what the cuts would be and not hide behind old saws like "fraud, waste and abuse."

Whether brinksmanship or severe cuts, Americans would pay a price either way.

• Keith Peterson, of Lake Barrington, served 29 years as a press and cultural officer for the United States Information Agency and Department of State. He was chief editorial writer of the Daily Herald 1984-86.