Hours before the U.S. House of Representatives voted to raise the debt ceiling, Minnesota DFL Rep. Keith Ellison announced he couldn’t support the plan because it cuts spending too deeply.
He also said the deal is unprecedented.
“This is the first time in the history of the United States that a debt ceiling increase, which is a routine thing, has been linked to deficit cuts, right – and budget cuts,” he said. “This is the first time.”
Several lawmakers, including Ellison, have repeated this claim. And they’re all wrong.
The deal signed into law this week would raise the debt ceiling immediately by $900 billion and cut spending by $917 billion over 10 years. Congress will next have to approve a second ceiling increase of between $1.2 trillion and $1.5 trillion later this year, after a joint congressional committee identifies up to $1.5 trillion in additional cuts.
Automatic spending cuts kick in if Congress can’t follow the plan.
Certainly the deal is unique in its savings and debt targets, but it’s not the first time Congress has linked spending cuts to an increase in the debt ceiling:
1985: As part of a $175 billion debt limit increase, Congress first approved the Gramm-Rudman-Hollings Act. While there were no specific spending cuts outlined in the legislation, the language set deficit reduction targets. Across-the-board cuts were built into the bill to keep the deficit from exceeding those targets – much like the triggers in the most recent debt deal.
1997: Former President Bill Clinton struck a deal with congressional Republicans to cut a net of $122 billion in mandatory spending over five years and raise the debt limit to $5.95 trillion from $5.5 trillion as part of the Balanced Budget Act of 1997.
2010: A $1.9 trillion debt ceiling increase also revived statutory pay-as-you-go rules that require spending cuts under certain circumstances. If Congress were to cut taxes or mandated spending increases, spending would automatically be cut in other areas, though programs such as Social Security and Medicaid are exempt.
In other instances, lawmakers have attached a debt ceiling increase to budget bills essentially to accommodate projected spending.
Ellison’s spokeswoman could not provide sourcing for the claim, saying that the lawmaker had heard it from colleagues.
Ellison said raising the nation’s borrowing limit has never been paired with deficit cuts. But a look back on the debt ceiling’s history shows that it’s not the first time Congress has linked cuts and debt targets.
His claim is false.
National Public Radio News, Ellison Offers Progressive View Of Debt Deal, Aug. 1, 2011
The Congressional Budget Office, the Budget Control Act of 2011, Aug. 1, 2011
The Associated Press, Questions and answers about the debt-deficit deal, by Jim Abrams, August 2, 2011
The White House, Office of Management and Budget, Historical Table: Debt Limit Increases, accessed July 28, 2011
Reuters, Factbox – Key elements of U.S. debt deal, Aug. 1, 2011
The Committee for a Responsible Federal Budget, Understanding the Debt Limit, July 14, 2011
PolitiFact Florida, Allen West says spending cuts are part of the debt ceiling increase for the first time in history, by Angie Drobnic Holan, July 29, 2011
The Congressional Research Service, The Debt Limit: History and Recent Increases, July 20, 2011
THOMAS, Summary of the Balanced Budget Act of 1997, accessed Aug. 2, 2011
The Congressional Research Service, Debt-Limit Legislation in the Congressional Budget Process, May 8, 1998
Interview, the Center for Budget and Policy Priorities, Aug. 2, 2011
Interview, Ed Lorenzen, Senior Advisor, Committee for a Responsible Federal Budget, Aug. 2, 2011