Outside the Beltway

A Tidbit on the Debt Ceiling

Steven L. Taylor · Thursday, February 13, 2014 · 3 comments

Thankfully, there will be no game of chicken over the debt limit this year, as the Congress did the responsible thing and passed a clean debt limit increase to accommodate spending already budgeted.

As many probably know at this point, the origins of the debt ceiling mechanism is the 1917 Liberty Bond Act and over time the vote has mostly been pro forma.  Recently, of course, that has changed.

Here’s a bit of history that is of interest:  starting 1979 the House Rules were amended to create an automatic increase in the debt limit linked to the passage of the annual budget resolution (this was known as the “Gephardt Rule”)..  That meant no debt ceiling fight in the House of the type we have witnessed of late, although the Senate lacked such a rule.

The rule was repealed at the start of the 107th Congress (2001-2003, GOP majority), restored at the beginning of the 108th (2003-2005, GOP majority) and then repealed again at the start of the 112th (2011-2013, GOP majority).

In short, part of the reason the debt limit was not a major political football for many decades was because the House had a reasonable rule that automatically acknowledged that the amount set by the budget resolution should be covered by the debt limit.