Federal Reserve Chairman Ben Bernanke had a succinct message today for lawmakers looking to monkey around with the debt ceiling — don’t do it. He also blew a hole in the myth that the debt ceiling has something to do with future spending, as opposed to spending already authorized by Congress:
Likening Congress to a family arguing that it can improve its credit rating by deciding not to pay its credit card bill, Bernanke said that raising the legal borrowing limit was not the same as authorizing new government spending.
“It’s very, very important that Congress takes the necessary action to raise the debt ceiling to avoid a situation where our government doesn’t pay its bills,” he told an event sponsored by the University of Michigan.
House Republicans have threatened to take the debt ceiling hostage in order to secure cuts to entitlements and other domestic spending. During a press conference today, President Obama excoriated Republicans for trying to take use the debt ceiling as leverage. “They will not collect a ransom in exchange for not crashing the American economy,” he said. “The full faith and credit of the United States of America is not a bargaining chip.”