Executive Policymaking
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Andrew Rudalevige. Executive Policymaking
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EXECUTIVE POLICYMAKING
The Role of the OMB in the Presidency
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In addition to shutdowns, threats to not increase the debt limit further increase budgetary uncertainty. The statutory limit on the national debt was created in 1917 in reaction to the need to provide continuing funding for World War I. Before that, Congress had to pass separate authorizations when additional borrowing was needed, in order for the Treasury to borrow money. In contemporary times, however, the statutory debt limit has been used as a “fiscal suicide vest” in which the full faith and credit of the United States is put at risk for one party to extract concessions on fiscal policy. Treasury Secretary Jack Lew observed: “the debt limit has morphed into a weapon that irresponsible actors in Congress can wield against our economic well-being.”79
From 2011 to 2019 the debt limit was approached several times. In these cases the Treasury Department shifted cash balances and took extraordinary measures (that is, shifting funds among accounts; for example, from Social Security and Medicare trust funds) to pay its ongoing expenses. In the final resolution of each of these disputes, Congress suspended the debt ceiling until a specific date, when a new round of negotiating over fiscal policy had to begin.80
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