Fighting about the Debt Limit — Yuck!

By Ashley Bean Thornton

This whole debt ceiling stand-off and the accompanying chatter about potential economic collapse is giving me the heebie-jeebies!  I am too close to retirement for us to be dinking around with economic collapse!

I thought it might help reduce my fretting to try to learn a little bit more about it.  Here is what I think I learned – please feel free to join the conversation if you think I have learned something wrong.

Where does the debt come from?

Every year our government takes in money via taxes and spends money via appropriations. If we spend more money than we take in, we borrow to make up the difference.  The amount we borrow each year is called the deficit.  We run a deficit, sometimes a big deficit, just about every year.  (The last time we did not run a deficit was 2001.) [i]

Over the years, all this deficit borrowing accumulates.  The total accumulated amount that we have already borrowed and are obligated to pay back is our national debt.

How does the Federal Government borrow money?

The government borrows money by selling securities, for example Treasury bonds. [ii]  People or organizations or countries buy these securities as an investment.  They buy them for a certain amount and then receive that amount plus interest in an agreed upon length of time – for example 20 or 30 years.  As the name implies, these investments are considered extremely “secure” since they are backed by the “full faith and credit of the United States Government.” These securities mature constantly on a rotating basis, and we (the government) pay back the principal, plus the interest.  Meanwhile, we (the government) are also constantly selling more securities – up to the amount allowed by the debt limit – to obtain more money to pay our immediate bills.

So far, we have always paid off our securities fully and promptly.  That’s why they are considered such a secure investment. That is why so many people, organizations and countries are eager to buy our securities.  That is why we are able to pay favorably low interest for the money we are borrowing.

What is the Debt Limit?

The Debt Limit, or Debt Ceiling, is theoretically the maximum amount of money that the government is allowed to borrow. Congress sets the Debt Limit and Congress has the power to raise or lower it.  There is no “higher authority” that determines the maximum amount the government can borrow. The Debt Limit is meant to be a self-imposed upper limit of the national debt. But, weirdly, now the debt limit seems to be working more like a limit on how much we plan to pay back, instead of a limit on how much we plan to borrow.

Here’s the confusing part…

Congress decides how much we are going to spend (appropriations).  They also decide how much we are allowed to borrow (debt limit).  Yet for some reason these two decisions do not line up.

In other words, congress votes to spend a certain amount of money.  They know when they vote on it that it is going to push us past our debt limit, but they decide to spend it anyway.

Then later they vote again on whether or not to raise the debt limit to pay for the expenditures they have already made based on previous votes.

They have already voted to spend the money and incur the additional debt.  Why do they have to vote again to decide they are going to pay the debt they have already incurred?

It turns out I am not the first person to wonder about this.

The Gephardt Rule

Once upon a time – in 1979 — a congressman from Missouri, Dick Gephardt, wondered the same thing. [iii]  He proposed that the following parliamentary procedure (Rule XXVIII) be added to the Standing Rules of the House of Representatives:

“Upon adoption by the House of a concurrent resolution on the budget under section 301 or 304 of the Congressional Budget Act of 1974, the Clerk shall prepare an engrossment of a joint resolution suspending the statutory limit on the public debt in the form prescribed in clause 2.” [iv]

In regular English, that means that whenever the House of Representatives passes a budget, it will be assumed that they are also agreeing to pay the debt associated with that budget, thus eliminating the need for a second vote to raise the debt limit.  This rule, sometimes called the Gephardt Rule, was accepted and Congress behaved accordingly until 1995.

Nothing is ever that easy though…

Predictably, not everybody likes the Gephardt Rule.  Since the Gephardt Rule is a parliamentary rule in the House of Representatives and each House gets to vote on its own set of rules, the Gephardt Rule comes and goes depending on who is running the House.

People who support the Gephardt Rule say that the appropriate place to discuss spending is during budget discussions – not after the budget decisions have already been made and the money has already been spent.  They say the rule saves time and that it just makes common sense to automatically adjust the debt limit once we have decided to spend the money.

People who don’t like the Gephardt Rule say that having a separate vote on the debt limit puts a spotlight on how big the debt is getting and makes politicians own up to their spending by having their names officially associated with having voted to increase the debt limit.

Generally, although not always, whichever party has the most political power supports the Gephardt Rule in the interest of “efficiency and sensible fiscal management” and whichever party is out of power very righteously believes we need to get rid of the Gephardt Rule “in the interest of transparency.”

Regardless of whether the Gephardt Rule has or has not been in effect, raising the debt limit has basically been more or less a formality because, as explained above, the money has already been spent and no one wants the United States to default on its loans.

…Until 2011

In 2011, for the first time, the House of Representatives seemed to be seriously considered voting against raising the debt limit.   Although eventually the debt limit was raised, just the fear that the United States might default on its loans had serious consequences for the economy. Stocks fell sharply and the Government Accounting Office estimated that delays in raising the debt limit in 2011 led to an increase in Treasury’s borrowing costs of about $1.3 billion in fiscal year 2011. [v]

We don’t really know what would happen if we did actually default on our debt – we have never done it before – but I haven’t heard or read anyone say it would be good.  At the very least we would undoubtedly have to pay higher interest rates for future borrowing, which would be a huge additional cost to us with no benefit. At the very worst — who knows??? People throw around all kinds of scary scenarios.

Why do we even have a debt limit?  

Honestly, I don’t understand why we even have a debt limit.[vi]

If we are not going to use it to limit our spending before we spend, I don’t understand what good it does.  It does not seem to have reduced our spending or made us any more fiscally responsible, at least in my lifetime.

Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit – 49 times under Republican presidents and 29 times under Democratic presidents.[vii] Congress has never lowered the debt limit.

Ironically, the first debt limit was put in place to make borrowing easier, not harder.  It was originally established in 1917 so that we could sell war bonds to borrow money to finance our participation in WWI. Now, as far as I can tell, the debt limit vote has basically become a political game that has the potential to make it harder for us to borrow money at a favorable interest rate.  The whole debate would just be a silly waste of time if it weren’t so dangerous for our economy, and possibly for the economy of the whole world.

Other countries do not constantly bump their heads against their debt ceiling like we do.  Among advanced countries only Denmark sets a specific debt limit, and theirs is so high that for all intents and purposes it is not really a limit at all.   Some other countries – including the EU – tie their debt limit to their GDP. Most other countries – Canada, Australia, UK for example – just don’t have a debt limit. [viii]

It seems like our version of the debt limit is the worst of all possible choices – dangerous to our creditworthiness and not useful as a guide to spending. I think we would be better off without it. After studying it a bit I have the impression that the debt limit is one of those things that sounds good, but isn’t really good.  It sounds good to say we need to limit our debt, but what we really mean is that we need to limit our spending.  By the time our spending leads to debt it is too late to talk about “limiting,” we just need to pay it.


********* Email sent to Pete Sessions (4.28.23) *************

Dear Mr. Sessions,

I am very concerned about the current fruitless and dangerous debate about the debt limit.  I strongly urge you to use your influence in the House of Representatives to expeditiously approve the proposed increase to the debt limit so that there is no question about the full faith and credit of the United States.

I certainly understand that we need to be responsible in our spending as a nation — but I also understand that the time to curb spending is during the budgeting process.  Once the money has been obligated it is too late to argue about whether or not we will pay our bills.  I consider the current conversations about refusing to approve or suspend the debt limit to be the worst kind of political showboating.

I plan to retire in the next few years and my income will depend on my investments and my Social Security payments.  I depend on you and my other elected officials to work hard to keep our economy stable so that my years of hard work will result in the retirement for which I have planned and saved. 

I do not appreciate the House of Representatives gambling with my future.  I remember that in 2011 the stock market took a dive because we had a similar “stand-off” about the debt limit.   I do not want to see that kind of thing – or worse – happening this time. 

The debt limit seems to me to be an archaic bit of legislation that has long since passed its usefulness.  I see no evidence that it helps us to reign in our debt one bit. Instead, at the very least it wastes everyone’s time.  At worst it damages our nation’s creditworthiness and threatens economic chaos.

It is high time that we put the considerable experience and expertise of our elected officials to use finding a better way to wisely moderate our spending than this embarrassing, dangerous, and ultimately useless and ill-timed mud-wrestling match.

Sincerely, your constituent, Ashley Thornton



[i] National Deficit | U.S. Treasury Fiscal Data


[iii] A Simple Rule Could End Debt-Ceiling Shenanigans – WSJ

[iv] Constitution, Jefferson’s Manual, and the Rules of the House of Representatives, 117th Congress-Rule XXVIII.Statutory Limit on the Public Debt (

[v] Debt Limit: Analysis of 2011-2012 Actions Taken and Effect of Delayed Increase on Borrowing Costs | U.S. GAO

[vi] Why Congress needs to abolish the debt limit: Testimony before the House Budget Committee (

[vii] Debt Limit | U.S. Department of the Treasury

[viii] The US debt limit is a global outlier – Atlantic Council


1 Comment

  1. Margo Yeager on April 29, 2023 at 11:55 am

    As always, very concise and clear. I didn’t know about the Gephardt Rule. Very interesting.

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