Op-Ed: Matthew Dickerson: The debt limit is an opportunity for a down payment on DOGE
"By using the debt limit to deal with the underlying problems that caused the debt explosion in the first place, President Trump could enhance the nation’s creditworthiness and reap the rewards..."
Much to President Donald Trump’s chagrin, the $36 trillion debt limit will need to be increased again as early as June in order for the federal government to be able to pay all obligations on time. But that’s not all bad news for the incoming administration. The famed inflection point gives them an opportunity to enact some of their most ambitious ideas.
More than $4.7 trillion has been added to the national debt since the debt limit was last suspended in June of 2023. That equates to $99,000 of new debt every second. That’s the kind of statistic that is animating the energy behind President Donald Trump’s Department of Government Efficiency (DOGE) initiative, led by Elon Musk and Vivek Ramaswamy. The debt limit presents a crucial opportunity to control wasteful spending and to streamline government.
It’s true that President Trump has voiced frustration at having to deal with the debt limit, pointing to the massive run-up of debt caused by President Joe Biden and the possibility that Democrats could make demands that would put America’s credit at risk. However, there is another way…
Going back 40 years, debt limit increases have been paired with deficit reduction deals. Examples include the landmark Gramm-Rudman-Hollings Act in 1985, the balanced budget deals of the 1990s, and the Budget Control Act of 2011.
Under the reconciliation process, Republicans can responsibly accomplish this pairing all on their own, and on their own terms. The sky is limit for the spending cuts they can achieve in the budget reconciliation process because it allows budget legislation to bypass the Senate’s 60-vote filibuster threshold.
President Trump said he wants “one big beautiful” reconciliation bill that will secure the border, unleash American energy, and extend and expand the 2017 tax cuts. And voters want to see these important priorities achieved as quickly as possible.
Including the debt limit in the reconciliation package will create an additional sense of urgency for getting the legislation across the finish line. After all, the deadline for the debt ceiling is June, just six months away.
Speaker Mike Johnson (R., La.) floated a proposal to increase the debt limit by $1.5 trillion, paired with $2.5 trillion in spending cuts in the reconciliation bill.
That proposed $2.5 trillion of spending reduction is approximately what is required to head off the looming debt spiral within the next 15 years. Those savings, plus the dynamic effects of achieving the Trump administration’s 3 percent growth targets would be enough to offset the tax cut extension.
The potential downside of this approach is that Republican lawmakers would have to supply all the votes to raise the debt limit. That’s a tall order with both chambers under Republican control by slim to tiny margins.
But the upside is that Republicans could pair the debt limit with popular policy reforms that Democrats would never go for, such as the America First Act to end taxpayer-provided benefits for illegal immigrants, enforcing work requirements for welfare, rolling back green energy subsidies, and aligning compensation for federal bureaucrats with the private sector.
Without these reforms, it will be impossible for any reconciliation package that includes a debt ceiling hike to earn the universal support of Republicans on the Hill. The simple fact of the vote count is that the debt limit can’t be raised by Republicans without DOGE spending cuts and reforms.
At Trump’s insistence, Speaker Johnson brought a “clean” debt limit suspension up for a vote in the House in December, without any accompanying spending reductions. But dozens of conservatives voted against the bill, saying it violated the spirit of DOGE.
Enacting any reconciliation bill will require near unanimity from the narrow Republican majorities in the House and Senate. If all Republicans in the House and Senate do not handle the debt limit in reconciliation, Speaker Johnson and Senate Majority Leader John Thune (R., S.D.) will be forced to ask Democrats for their votes.
In that scenario, Democrats are unlikely to agree to the spending cuts necessary to put the budget back on a sustainable path. Rather, they’ll turn their own policy goals into demands, just as President Trump has predicted.
His annoyance at having to deal with the debt limit is an acknowledgement that the government’s massive debt is unpopular. These political instincts are what led him to start the DOGE movement.
President Trump and Congress should see the debt limit as an opportunity for a down payment on DOGE. By using the debt limit to deal with the underlying problems that caused the debt explosion in the first place, President Trump could enhance the nation’s creditworthiness and reap the rewards.
Matthew D. Dickerson is Director of Budget Policy at the Economic Policy Innovation Center (EPIC). He was formerly a Senior Advisor to the House Budget Committee.
