It is possible that hell has frozen over. President Trump and I agree on something very important: Abolish the debt limit.
The debt limit is a political tool that allows the minority party to threaten economic collapse, forcing Congress to negotiate its demands. It serves no other function. None. It has no impact on spending, and it doesn’t restrain the growth of the national debt.
I’ve pushed publicly and privately, whether Democrats or Republicans have been in charge, to scrap the debt ceiling permanently. Now, with Mr. Trump’s support, our country could finally get rid of this form of brinkmanship that has, for decades, threatened the stability of our economy.
The debt limit caps the amount of money the U.S. government can borrow. If the government hits the limit before Congress authorizes an increase, the U.S. would default on its debt. That means not making interest payments on U.S. bonds, not paying our military or halting Social Security checks. Chaos in the financial markets could cause millions of Americans to lose their jobs, while the cost of home mortgages and car loans would skyrocket. In short, we would create a self-inflicted financial crisis.
Republicans claim they want to reduce the national debt, but their actions tell a different story. For decades, they have used their time in power to slash the taxes paid by wealthy Americans and corporations, forgoing trillions needed to fund our government. President George W. Bush’s and Mr. Trump’s past tax cuts alone drove up the national debt by an estimated $10 trillion. Then, whenever a Democrat made it into the White House, Republicans threatened to vote against raising the debt ceiling unless Democrats agreed to whatever political demands the Republicans were focused on.
Consider the last few times either party regained control of the White House. In 2011, when President Barack Obama was in office, Republicans refused to lift the debt limit until Democrats agreed to $2 trillion in cuts, which cost the economy up to seven million jobs and substantially delayed our recovery from the Great Recession. When Mr. Trump won the election in 2016, Republicans promptly increased the national debt by passing a $1.9 trillion giveaway, largely to rich people and giant corporations.
And when control flipped to President Joe Biden? First, Democratic leaders failed to take away the opportunity to weaponize the debt ceiling when they had the chance. And then Republicans used their veto in Congress to weaponize the debt ceiling, agreeing to lift it only if Democrats cut spending, which put nearly 750,000 Americans at risk of losing food assistance.
That brings us to today. Now that Republicans are in power again, they are trying to pass another wave of tax handouts for millionaires, billionaires and corporate giants, which would cut trillions needed to operate the government. To make up for some of those tax breaks, Republicans plan to rip health insurance away from 16 million Americans and cut food assistance from about a million children, but even those punishing cuts don’t produce enough savings to offset the lost revenue fully. Republicans know that the tax giveaways to billionaires will increase the national debt, so they have sneaked a $4 trillion increase to the debt limit into their bill.
The Republican tax bill illustrates a key point: The debt limit doesn’t stop a single penny of spending. The party in power can simply raise the limit to accommodate their new spending. Keeping the debt ceiling around just feeds the political games as one party or the other threatens to block any increase and lets our country default.
Mr. Trump has repeatedly urged Congress to abolish the debt limit. Last December, he said that “the debt ceiling should be thrown out entirely” and called on Congress to get it done as part of the year-end spending deal. I said at the time that Mr. Trump was right. But the House’s Republican leadership and the Senate’s Democratic leadership ignored Mr. Trump, demonstrating that they would prefer to keep the debt limit and continue to govern by hostage-taking.
Budgets are statements of our values. I believe it is wrong to strip 16 million Americans of their health insurance so that Jeff Bezos, a beneficiary of the proposed tax cuts, can buy a third yacht. It’s wrong to take away home health aides from people with disabilities so that Mark Zuckerberg can buy another Hawaiian compound. It’s wrong to push seniors out of nursing homes so that Elon Musk can take a rocket ship ride to Mars. The current “Big, Beautiful Bill” is morally bankrupt, and I will continue to fight against it.
But right now, we have a chance to make a permanent change that benefits our nation. Republicans in Congress can set aside their big, beautiful billionaire budget while lawmakers of both parties can come together to do what Mr. Trump urged last week, to recognize that the debt limit is “too devastating to be put in the hands of political people that may want to use it despite the horrendous effect it could have on our country.”
The president is right on this point: Let’s scrap the debt ceiling once and for all.
Elizabeth Warren is a United States senator for Massachusetts and was a candidate for president in 2020.
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