Does the Budget Deal Allow Obama To Borrow Unlimited Amounts?
In the Republican debate, Sen. Rand Paul (R-KY) said the recent budget deal “allows President Obama to borrow unlimited amounts of money.”
Paul is referring to a provision in the budget deal passed by the House earlier today. That provision suspends the debt ceiling through March 2017. At that point, the debt ceiling will be reinstated to the new level of debt outstanding. If the deal passed, there will effectively be no debt limit between now and March 2017, allowing unlimited amounts of borrowing.
However, if there is no debt limit, there are still limits on government spending. The executive branch can only spend the amount of money that is determined by Congress in the budget and appropriations bills. For instance, the continuing resolution currently in effect caps discretionary spending at an annual level of $1.017 trillion. Mandatory spending is limited by formula, and cannot climb to “unlimited” amounts. The budget deal also prohibits the Treasury Department from running up debt that is not needed to operate the government.
The budget deal does allow the debt limit to be suspended through March 2017, but government spending is still limited by appropriations bills, the budget, and mandatory spending formulas determined by Congress. It does not “allow President Obama to borrow unlimited amounts of money.”