A close-up shot of the exterior dome of the U.S. Capitol for the article "Why Does Donald Trump Want To Remove The Debt Ceiling?"

Why Does Donald Trump Want To Remove The Debt Ceiling?

The Debt Ceiling of the United States has been controversial since its inception in 1917. Some legal scholars have argued that it is unconstitutional because it does not provide a mechanism for the federal government to meet its constitutional obligation to repay its debts once it meets the borrowing limit. Others have further contended that it does not give the U.S. the authority to default on its debt. The Debt Ceiling has also been politicized. Several politicians have wanted it increased further. Others have called for its abolishment. Donald Trump first suggested its elimination in May 2017 and has reiterated this position in December 2024.

The Debt Ceiling Debate: Why Donald Trump Wants It Gone?

Background

A debt ceiling is a legal cap on the total amount of debt a government can incur. This limit is established through legislative action. Hence, when the government reaches this ceiling, it loses the ability to borrow further until the debt limit is raised or the existing debt is reduced. Some have argued that failing to increase the limit would leave the U.S. unable to pay its debts.

Note that this limit also grants Congress oversight over government borrowing and expenditure. This aligns with the broader principle of checks and balances. It also acts as a platform for lawmakers to engage in discourse and negotiation regarding economic or fiscal policies. These include spending allocations, tax rates, and strategies for reducing budget deficits.

There are situations in which raising the debt ceiling is needed to enable the federal government to borrow more money through the issuance of government bonds to finance its expenditures. There are also instances when policymakers fail to reach an agreement over this due to preconditions from another party. This dispute results in a standoff and triggers a debt ceiling crisis.

For example, during the debt crisis in 2011, Republicans demanded then U.S. President Barack Obama to negotiate over deficit reduction in exchange for raising the debt ceiling. The crisis in 2023 was triggered when Republican lawmakers proposed cutting spending back to 2022 levels while Democrat lawmakers insisted on raising the limit without precondition.

Trump

Donald Trump first suggested eliminating the debt ceiling entirely in 2017. He expressed his frustration over the recurring debates in the U.S. Congress and the political standoffs that follow. He called these instances a waste of time and argued further that removing the limit on federal government borrowing would streamline and improve government financing.

Nevertheless, during his first term as president, the ceiling was suspended multiple times without preconditions and partisan conflicts. The approach of Trump was pragmatic. He was focused on avoiding fiscal crises rather than engaged in prolonged legal battles over the issue. But he also used the issue as a negotiating tool to advance his budget and legislative priorities.

The debt ceiling was lifted from 20 September 2017 to 8 December 2017 as part of a bipartisan agreement between Trump and Democrats in the U.S. Congress to fund the government and provide disaster relief. It was also suspended from 1 March 2019 to 2 August 2019. A two-year suspension occurred beginning in August 2019 as part of a budget agreement.

Reiteration

Donald Trump reiterated this position in December 2024 during the heated issue surrounding the stop-gap spending bill designed as a temporary measure to prevent a government shutdown and maintain essential federal operations. He intervened in congressional negotiations and insisted that any agreement should include provisions to either raise or abolish the debt ceiling.

The incoming president essentially wants the borrowing limit removed before he takes office for his second term in January 2025. He shared his sentiments on Truth Social and urged the U.S. Congress to either eliminate it or extend its suspension until 2029. Trump also noted that the issue should be resolved to prevent a potential fiscal confrontation early in his term.

Remember that Trump has expressed his disdain toward the recurring debates over the debt ceiling. He wants to avoid this in his term because it could potentially interfere with his legislative agenda. Trump also wants it resolved before he takes office to shift potential political fallout to the outgoing Biden administration while granting him more influence over budgetary decisions.

Trump has also been known for tax cuts. These cuts increase the national debt. Critics on social media have argued that his desire to remove the debt ceiling stems from his plan to promote policies that will favor his corporate allies. Tax cuts that will benefit the rich would increase the national debt without the political consequences of another debt ceiling debate.