It’s the ultimate sweetheart deal for a free-spending federal government: Wednesday night’s debt deal didn’t actually raise the limit on America’s credit card, but instead removed it entirely until February 7, 2014.
Whether through legislative sleight-of-hand or something less sinister, the law of the land now permits the U.S. to run up new debts for 16 weeks without consequences, and forbids the Treasury Department from enforcing the debt limit that ordinarily keeps spending from spiraling out of control.
Some observers noted on Wednesday that when Congress burned the midnight oil to debate a deal that would save the U.S. from crashing through its existing $16.7 trillion debt ceiling and risking a credit default, there was no debate over exactly how far to raise it.
House and Senate negotiators only discussed how long the agreement would last.
The Bipartisan Policy Center estimated that if the government had extended its debt ceiling in this fashion through the end of 2014, as one Republican proposal suggested, the federal government’s debt would have ballooned by $1.1 trillion.
At that rate, the national debt will likely grow by at least $282.5 billion on its own by the time Feb. 7 rolls around, bringing the total close to an even $17 trillion.
But there’s no guarantee it won’t grow even faster, especially if the legislative initiatives President Obama outlined Thursday morning were to cross the finish line by year’s end, as he demanded in his first public remarks since signing the debt-limit hike law shortly after midnight.
Obama said he wants Congress to give him a new budget deal, a 5-year farm bill and a comprehensive reform of America’s immigration laws, all before New Year’s Day.
Any one of those three could be a colossal budget-buster. Under ordinary circumstances, a hard-and-fast debt limit might serve as a check against runaway spending; but with no ceiling, Democrats could raid the Treasury to give the president what he wants, without fear of practical roadblocks getting in the way.