Get Rid of the Debt Ceiling Once and for All

Regularly putting the entire economy at risk is in no way “fiscally responsible.”

By Robert E. Rubin

By now the scenario is familiar, but at the time it was unprecedented: House Republicans, having recently won a majority in the midterm elections, threatened to force the United States to default on its debt unless a Democratic president acceded to their demands.

The year was 1995, and I was serving as secretary of the Treasury under President Bill Clinton. Raising the debt limit to avoid default, which had previously been a perfunctory matter, was now a catalyst for crisis. For months, Speaker Newt Gingrich threatened to plunge the country into default unless Clinton signed the House Republicans’ budget bill.

Having come from the financial industry, and being relatively new to Washington, I remember being surprised. I knew the legislative process was messy, and that hostage-taking was frequently part of it. Still, the notion that the government of the United States would, for political reasons, not meet its financial obligations seemed outside the realm of possibility.