How the debt ceiling became a game of political chicken that continues to threaten our economy
Though we're down to the wire, with a vote on the deal expected in the House Wednesday evening, it's not always been this way. Congress created the debt ceiling in 1917 to control military spending as the US took on debt to enter World War I. Over the years, this"power of the purse" has been used to curb spending and limit the executive power of the president.
However, Congress turned this tool on itself in the 1990s when Republicans used the threat of default to force spending cuts from Democrats. Now a tool for negotiation within Congress rather than a check on the president, the Department of the Treasury has had to step in over and over to make sure US debt is safe for investment, keep the government running, and buy Congress time to raise the debt limit.
These 15 slides cover how the debt limit has evolved into a tool for one political party to extract concessions from the other by putting the US on the brink of default time and time again.Buyenlarge/Getty In 1917, shortly after the United States entered World War I, Congress passed the Second Liberty Bond Act to give the US Treasury Department the authority to issue bonds and other debt without congressional approval.
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