Category Archives: CFCEG

What to Do about Tariffs

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By Steve Levy

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The Supreme Court striking down President Trump‘s across-the-board tariffs was no surprise to us. We wrote months ago that his actions were not supported by law. 

The Constitution is clear: Tariffs fall under the purview of Congress

Trump saw then-President Obama getting away with illegal actions such as DACA and then-President Biden playing games with student loans, so he figured, “What the heck, I might as well play this game as well.”

Despite his going about tariffs in an improper fashion, the question remains as to whether tariffs are a good idea in the first place.

There is a tendency for many who are virulently anti-Trump to take the position that tariffs are a bad thing simply because they’re promoted by the orange man they so despise.

Hypocrisy on the Right and the Left

But what’s ironic is that the same leftists who have been bashing tariffs since Trump proposed them were, in years past, the strongest proponents for instilling these tariffs to help bolster middle- and working-class employees in manufacturing and their union constituencies here at home.

Inconsistencies were evident as well with the many Republicans who had for years bashed the idea of tariffs, but sat silently as their Republican president promoted them.

The Tariff Issue Is Nuanced

The question of tariffs is far more nuanced than either of these two extremes.

In a perfect and fair world, we would adopt the Adam Smith Wealth of Nations approach that free trade is the best way to go. Prohibiting the interference on trade and allowing the cheapest goods to flow into the market would benefit all.

Perhaps. But we don’t live in that make-believe world.

We live in a world where some nations impose protective tariffs, while others are more lax. And, of course, it’s been the United States that has been the most lax when it comes to allowing foreign goods to enter its shores.

The U.S. Was at a Disadvantage

Bill Clinton ushered in the age of globalization and gave China most-favored-nation status.

Amazingly, China, the second-largest economy in the world, is still classified by the World Trade Organization as a “developing” country that is entitled to be protectionist.

This is lunacy and President Trump was the one president willing to rightfully point it out.

Our Manufacturing Industry Was Gutted

This lopsided disparity between high and low tariffs from one country to another gutted the American industrial manufacturing industry.

Trump was absolutely justified in calling out the fact that BMWs and Hondas could flow freely into America to be sold to our consumers, but Fords and Chevys were denied access to Germany and Japan.

Why did this happen? Because we allowed it to.

So there is good reason for a president to change this trajectory. The problem is that Trump went about it the wrong way

Bessent vs. Navarro

There were two camps within the Trump administration when it came to tariffs. One was promoted by Treasury Secretary Scott Bessent, and the other was advocated by Peter Navarro.

Navarro has done America a tremendous service by being the point man in Trump‘s first administration who sounded the alarm that China is not our friend and we must start decoupling from them. He was especially angered by the gutting of working and middle-class jobs in the Rust Belt as jobs were shipped overseas due to a lack of U.S. tariff reciprocity.

His goal to bring back America’s manufacturing base is a noble one, but his way of accomplishing it is not realistic.

Navarro wanted across-the-board tariffs, making imports more expensive, thereby encouraging American manufacturers to rebuild. The higher cost we would pay at the checkout counter would be more than offset by the boom to the economy with the thriving industrial base and the increase in jobs and wages that would come about from a new manufacturing renaissance in America.

Sounds good, but it’s highly unrealistic given that labor laws, environmental regulations and red tape are still so high in America that low-cost production here is unlikely.

National Security Concerns

But there are instances, especially where national security is concerned, where it shouldn’t matter. Trump was right in sounding the alarm that we cannot remain dependent on our adversaries for needed military hardware, computer chips, or life-saving pharmaceuticals. The production of steel is another area where we cannot be dependent on foreign nations.

So, a targeted set of tariffs would be a good thing, especially on those nations such as India, which has blocked U.S. motorcycles from being sold there.

And that’s where Bessent’s idea for targeted tariffs comes into play. Had Bessent prevailed on Trump’s ultimate policy, we would be in a much better place.

Specifically targeted tariffs could’ve been implemented on a gradual, one-nation-at-a-time basis. It wouldn’t have spooked businesses as did Trump‘s initial plan. And it would also have been far less likely to be thrown out on constitutional grounds.

The Supreme Court notes that, where national emergencies are concerned, the president does have more leeway. But how can the president claim that there’s a national emergency when he’s implementing across-the-board tariffs on every country? It undercuts his own argument.

A specific tariff against China, our political and economic adversary, would be much more likely to withstand constitutional muster

So the Supreme Court has introduced a needed course correction.

Executive Leeway Needed for Leverage 

We think it’s important for the president to have some leeway with tariffs. They proved to be tremendous leverage for him and indeed have even been used to help stop wars overseas. But they have to be done logically and within the parameters of the law.

Don’t throw the baby out with the bathwater. When it comes to tariff infringements, the answer is to mend them, don’t end them.

Let’s not go back to the pre-Trump era where we were taken advantage of by many countries around the world simply because we wanted the lowest prices possible on our imports at the expense of our ability to export.

Tariffs can be useful if they’re targeted and done on a gradual basis. Let’s hope that lawmakers on both sides of the aisle come to realize that.

Steve Levy: How New York’s extremist green policies have caused electric rates to soar

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A new report issued by our Center for Cost Effective Government confirms that progressive policies implemented by New York’s Legislature designed to tackle climate change have caused energy rates in the state to skyrocket, with few environmental benefits.

In fact, these policies increased electric bills by roughly 50 percent in the six years since their implementation.

In 2019, Albany enacted a sweeping law, the Climate Leadership and Community Protection Act, imposing mandates seeking a 40 percent reduction in greenhouse gas emissions by 2030, and zero greenhouse gas emissions by 2050. It also calls for 100 percent renewable electricity use by 2040.

But recently, New York’s government has been quietly telling the utilities to slow-walk the decommissioning of gas-fired power plants. And after the November election, Gov. Kathy Hochul officially retreated from the unrealistic mandate requiring electric heat in new buildings until a lawsuit on the issue concludes.

The state’s progressive policies included numerous initiatives many now regret, including shutting down nuclear plants; refusing to frack in New York; refusing to approve natural-gas pipelines; requiring all new buildings be heated with electricity; imposing carbon penalties on utilities, passing costs to consumers; and mandating that all cars be electric by 2035.

Ironically, New York’s carbon footprint wound up being worse after passage of this bill, while electric rates soared. Curtailing natural gas had devastating consequences, both economically and environmentally. It was the transition from dirtier coal and oil to cleaner natural gas that dropped U.S. greenhouse emissions by 14 percent from 2005 to 2019, while emissions were increasing worldwide.

Rates are slated to increase further, with the New York State Electric & Gas company saying it will charge 23.7 percent more in 2026, while National Grid is seeking increases that could raise bills upstate by $600 a year.

And Con Edison is seeking increases that would increase average gas and energy bills more than $150 higher than in 2020.

This reduced supply is exacerbated by the enormous energy required for the A.I. revolution. Large companies at the forefront of A.I. innovation put immense strain on the grid. A.I. data centers are becoming large energy users, outpacing even electric vehicles in their power demand growth.

Overly ambitious policy initiatives to shut down traditional power generation and replace it with less-reliable wind and solar energy have resulted in significant negative consequences worldwide. In Germany, an optimistic energy transition plan involved shutting down nuclear plants. In 2011, Germany’s 17 nuclear reactors generated over 33 percent of the country’s electricity. Their shutdown led to a return to fossil fuels. Consequently, greenhouse gas emissions and reliance on foreign energy sources actually increased.

These extreme policies have been mirrored in California, resulting in electric costs that are roughly 50 percent higher than the national average and gasoline costs that are 47 percent above the average.

The typical residential customer in New Jersey, which also promulgated extreme green policies, saw an increase of 17 to 20 percent last year. One resident of Clark, N.J., claimed that her bill rose from $174 in June to over $300 in July — this despite New Jersey’s Public Service Electric & Gas having told her to expect an increase of 17 percent.

Even once-touted wind projects are losing their luster when they come under greater scrutiny. According to NY Energy Ratings, “Developers are looking for a way to pay for the mounting costs of new wind energy projects. They have even asked the [Public Service Commission] to increase New York electric rates.” This is estimated to result in an increase of 4 percent, or $4.67 per month for ratepayers. Some projects are costing double what they were expected to.

Billionaire Bill Gates, who previously sided with the climate doomsday faction, has tempered his position, noting that the trillions of dollars being funneled to climate initiatives could be better spent relieving worldwide poverty.

Are you a better person if you pay an arm and a leg for extreme green policies that will have little impact on reducing the carbon footprint decades down the road? Or is it more cost-effective to concentrate those funds on saving lives today, via better health care and economic opportunity, while simultaneously investing in innovations that can provide cheaper, cleaner energy over a rational, gradual period of time?

https://www.liherald.com/stories/steve-levy-how-new-yorks-extremist-green-policies-have-caused-electric-rates-to-soar,220199: Steve Levy: How New York’s extremist green policies have caused electric rates to soar

Negotiate on Obamacare Subsidies to Get GOP Healthcare Plan Adopted

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By Steve Levy

The present federal government shutdown was, to many, obviously prompted by Senate Minority Leader Chuck Schumer’s need to show he’s willing to fight Donald Trump so he could mitigate a potential primary from AOC.

Yet, the Democrats have couched the shutdown they initiated around extending Obamacare subsidies enacted during COVID. They have concocted the story that Republicans in the One Big Beautiful Bill had eliminated Obamacare subsidies. To the contrary: Republicans retained the original pre-pandemic subsidies, but simply allowed the temporary additional COVID subsidies to expire as originally intended.

The Democrats are presently winning the public relations war, as polls show an overwhelming majority approve extending the healthcare subsidies. However, it’s doubtful that most polled were aware that the subsidies are referring only to the temporary additional funding that was authorized during the pandemic.

Nevertheless, while Republicans remain steadfast against funding healthcare for illegal aliens, they may be willing to foster compromise regarding the Obamacare reimbursements. 

This can actually be a positive development since it would provide the GOP with opportunities to finally incorporate some commonsense initiatives into Obamacare that they failed to achieve in the past.

We all remember how Trump’s efforts to eliminate Obamacare ended with a dramatic thumbs down by John McCain on the House floor.

The problem for Trump and the Republicans is that they never really had a cohesive healthcare alternative they could easily describe to the public. 

It is certainly true that Obamacare was extraordinarily costly, inefficient and unsustainable. But the 48 million people who were then uninsured, didn’t really care about the nuances — they just saw the Democrats trying to get them insured while Republicans were either dithering or simply fighting every Democratic plan offered. So the question was: Where’s the Republican plan?

Republicans received a justifiable reputation as being uninterested in the plight of these tens of millions of uninsured Americans.

Consequently, Democrats got credit for their plan, notwithstanding the fact that it was unsustainable and based on the lies that you could keep your doctor and experience a $2,500 drop in premiums. In actuality, premiums increased from an average of $13,000 to $24,000 since its inception.

There have been numerous Republican ideas to improve the system to make it less costly while expanding coverage. However, the rollouts have been disjointed, never receiving the momentum they deserved.

So, if the Democrats want to preserve not only the original Obamacare subsidy, but all additional subsidies, Republicans must ensure they don’t cave to this negotiating maneuver unless they get the reforms necessary to improve our healthcare system while making it more affordable.

Some of the proposals, as noted in my book, Solutions to America’s Problems, can include the following:

  • Modify the McCarren Ferguson Act to enhance the ability to obtain insurance across state lines.
  • Expand hospice care to help avoid the terminally ill being hooked up to remarkably expensive and ineffective procedures in the last six months of life. A study concluded that 5% of patients account for 50% of total medical costs. Another showed that one-third of that cost occurs in the last month of life.
  • Dramatically increase the doctor/patient ratio to mirror other industrialized countries. (The US ratio is 2.6 doctors for every 1,000 compared to 4 to 5 for every 1,000 in many European nations.) 
  • Implement tort reform. Obama’s first move setting up his program was to bar any conversation about lawsuit reform.

Exorbitant insurance rates aren’t just a result of medical malpractice cases, but more significantly, the enormous amount of unnecessary testing via defensive medicine. (An analysis found that 92% of private sector physicians admitted practicing defensive medicine, compared to 48% of government physicians.)

  • Create high-risk or reinsurance pools that spread the cost for the uninsured amongst all taxpayers and not just those paying premiums. In Alaska, 500 chronically ill patients were making it unaffordable for the rest of the population. They faced 40% premium hikes in 2017, before the implementation of a pool kept it down to single digits.
  • Allow consumers to customize their plans as they can with an auto policy, so they aren’t forced to pay for unneeded coverage.
  • Expand President Trump‘s efforts to lower prescription costs by ending our subsidy for Europe on research and development, eliminating the middleman in prescription purchases, requiring greater billing transparency and opening negotiations with Medicare.

These items need to be packaged into one big beautiful healthcare bill and properly pitched to the public that these reforms will be necessary to keep Obamacare sustainable. 

Republicans had warned that the ACA was anything but affordable and would lead to skyrocketing health costs for premium and taxpayers. They were proven right. 

The answer cannot be to simply continue increasing the subsidies on an annual basis to keep Obamacare afloat. At some point, the entire system will collapse. 

There’s an opportunity now to impose efficiencies, since the Democrats are eager to give the appearance of wanting to negotiate. Call their bluff.

Tax breaks not meant for companies cutting jobs

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  by Steve Levy

September 4, 2025

Industrial Development Agencies (IDA) were never intended to give tax breaks to companies threatening to leave.

A company based in Suffolk County threatened to downsize and move to another state unless the IDA agreed to give them $17 million in tax breaks. The IDA caved and granted the tax reduction. 

The IDA should have denied this request. 

IDAs are very controversial in that they provide tax breaks to some companies and not to others. When one company gets a break it means other companies and residents must make up for that revenue that does not come into the government coffers. We make exceptions, and justifiably so, in certain limited circumstances where we’re looking to incentivize a big company that will provide a large number of good paying jobs that are sustainable. It’s how we successfully utilized the IDA to bring in Computer Associates and its 2000 jobs in the 1980s. It’s the way I was able to lure Canon to establish its Northern Hemisphere headquarters in Melville, bringing thousands of jobs and spurring the local economy.

And just this past month, Suffolk’s IDA justifiably granted tax breaks for two existing pharmaceutical companies in Hauppauge that have planned to expand their operations and the number of jobs in their companies. The two companies, Gemini Pharmaceutical and Commerce Drive, LLC, will add another 75 jobs to their operations.

But we must be very careful that we don’t fall into the trap of giving tax breaks to companies that threaten to leave to cheaper pastures. Every company out there is feeling financial strain in competitive markets. Of course they’re over-taxed and over-regulated and the answer is to lower taxes for everyone and every business. 

If one business is allowed to get tax breaks by simply threatening to leave, what would stop every other business from doing the same and thereby destroying our tax base. 

Maybe they will eventually leave. Sometimes that’s what happens in the market, especially in our overtaxed area such as Long Island. But we can’t be granting these special privileges to a handful of companies at the expense of others where no new jobs are being created. 

Steve Levy is Executive Director of the Center for Cost Effective Government, a fiscally conservative think tank. He served as Suffolk County Executive, as a NYS Assemblyman, and host of “The Steve Levy Radio Show.” Costeffectivegov@gmail.com

Levy: Unsustainable growth will collapse Medicaid

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Levy: Unsustainable growth will collapse Medicaid

By: Steve Levy

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Since the passage of the 2025 Reconciliation Bill, much debate has ensued as to whether the provisions of the act will result in significant damage to the Medicaid system. However, as our Center for Cost Effective Government study concludes, the case could be made that these reforms are a necessary component of actually saving the Medicaid system.

The trajectory of Medicaid growth is simply unsustainable. What started in 1965 as a safety net for those living in poverty has since expanded dramatically to the point where in some cities, such as New York, over half of all residents are on the Medicaid rolls.

Eligibility for Medicaid increased exponentially over the years. While one had to have an income at or under the poverty line in the early years, some states now allow eligibility for those making 200% above the poverty limit.

Medicaid was turned into something for which it was never intended when in the Obama administration, eligibility was significantly increased in order to drive down the uninsured throughout the nation. The effort proved successful in meeting that goal, but at a tremendous cost.

It was not so much the Affordable Care Act itself that led to more Americans being insured as it was the fact that more were being covered by allowing them on Medicaid via relaxed eligibility standards. The ACA even opened eligibility to single adults.

Private, employer-based insurance was still available, but government sponsored or subsidized insurance was rising significantly. Further easing of eligibility transpired during the pandemic of 2020 and the political shift that allowed undocumented individuals to join the Medicaid rolls through state funds, even where federal law prohibited federal monies going toward this coverage.

The reclassification of “illegal” immigrants” to “legal” as a result of asylum claims and parole under the Biden administration, as well as covering illegal immigrants for “Medicaid emergency” led to even more individuals stressing the system. Spending on emergency Medicaid has roughly tripled, from $207 million in fiscal 2013-14 to $639 million in fiscal 2023-24.

Coinciding with the influx of 5.8 million asylum seekers and immigration parolees, was the huge expansion of the Bad Debt and Charity pool that covers hospitals for the cost of  no-pays. These costs, in large part covering illegal immigrants, have soared by 32% since 2022.

Moreover, the work requirements for Welfare that came into being with the Clinton administration were dramatically relaxed in the Obama and Biden administrations, especially after COVID.

Many Americans were finding it easier to just stay home and stop looking for work since they were being given free medical care anyway. This has aided in the unfortunate statistic of there being 7 million able-bodied men with no dependents no longer looking for work. In December of 2022, 56% of able-bodied, working-age Medicaid beneficiaries without dependents worked less than 80 hours in that month.

Transfers from the government accounted for 8% of an individual’s income in 1970. It is 18% today.

Meanwhile, Medicaid funds have been paid out to residents simply staying at home with their elderly relatives. While this program cost New York State $300 million in 2016, it rose to $9.1 billion in 2023.

All of these changes dramatically increased the eligibility and cost related to Medicaid. The program expanded as follows:

1960s: Medicaid was enacted in 1965, with approximately 4 million enrolled, and costing under $1 billion by 1966.

1970s: It was then expanded to cover women and children on welfare, raising the cost to $13.1 billion.

1980s: States covered more people regardless of welfare status, $23 billion spent in 1980 rises to $52.5 billion by 1989.

1990s: Coverage is expanded through the CHIPs program, raising costs from $73 billion in 1990  to $190 billion by 1999.

2000s: Some states begin covering childless adults, $206.2 billion in 2000 grows to $373.9 billion in 2009, with 33 million people enrolled.

2010s: ACA dramatically increases eligibility, skyrocketing costs from $400.6 billion in 2010 to $613.5 billion in 2019.

2020s: COVID measures increase enrollment to 72 million people, increasing costs from $672.4 billion in 2020 to approximately $900 billion in 2024. Today’s figure represents an 87,000% increase, compared to a rise in inflation of 892% during that same time period.

A flurry of acts in the 1980s increased eligibility from 100% of the Federal Poverty Level (FPL) to 133%. The level rose further through the ACA and COVID, where now some states cover individuals earning over 200% of the FPL.

Under the ACA, the federal government incentivized states to grow their Medicaid rolls by promising to pick up 100% of the healthcare costs associated with the new enrollees in the first few years of the program.

The federal share dipped gradually to 90% by 2020 but has remained constant since. But with no skin in the game, states welcomed the burgeoning rolls with little incentive to eliminate fraud and inefficiencies.

One can try to place a spin on the recent Medicaid reforms as being an attack on the underprivileged, but it is clear from the statistics above that Medicaid is an ever-growing behemoth that must be reformed if we are to save it for those for whom it was originally intended.

This is the way to save Social Security

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Had we adopted proposals from the 1990s, the trust fund would be richer today

by Steve Levy

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When the Social Security system was established in 1935, it had 42 workers for every retiree. Today, the ratio is a mere 2-to-3. At this rate, the system must reduce benefits to every retiree by about 21% in 2033 if nothing is done to shore it up.

Proposed fixes include significant tax increases on all taxpayers, raising the retirement age and further taxing Social Security recipients. Each of these options would be painful.

There is a better way.

For decades, some analysts have recommended allowing for investment of at least some Social Security funds in the stock market, as opposed to very conservative Treasury notes. Unfortunately, this suggestion has dead-ended, primarily because of the irrational fear that any investment in equities would inject too much risk into the stability of the Social Security trust funds.

Even officials supporting investment diversity hold back, fearing claims from the opposition party or media that the pro-investment officials are seeking to risk or cut the Social Security payments for millions of Americans.

A quick analysis clearly proves that these concerns about system losses resulting from stock investments are totally unfounded. In fact, it is shocking how much money has been lost to the system over the past 20 years because of the overly cautious investment schemes propagated by those managing the Social Security trust funds.

Despite the market’s most volatile times, such as the aftermath of 9/11, the pandemic or the real estate crash of 2007, had the trust funds been invested in a Standard & Poor’s index fund in 2005, they would now be flush with $6.4 trillion more than they are. Privatizing just 25% of the funds would have resulted in an additional $13,775 per person.

In 2005, the Social Security trust funds held $1.81 trillion. In 2025, the funds were at $2.8 trillion. This is an increase of 55.6%, a paltry 2.2% per annum.

Meanwhile, the Standard and Poor’s Index rose an average of 9.82% over that period. The index was 1,181 in January 2005. By January of this year, it was 5,979, an astonishing 406% increase.

There are two ways to seek greater returns through the market to strengthen the Social Security system. One mirrors that prescribed by former presidential candidate Steve Forbes, whereby younger Americans would be empowered to have greater control over the taxes they lay out for the Social Security system. Instead of all their FICA taxes going to the government, a portion could remain under the control of individuals, who could open their own 401(k)-type account that would grow over the years.

Concerns regarding a potential wipeout of the pension funds are unfounded because the money isn’t all invested or withdrawn at the same time, and the performance in a single year is not make-or-break.

Versions of this program have been successfully implemented in other nations, including Sweden and Australia. If a person began contributing to Sweden’s Premium Pension system in 2005 and invested in the default government-managed fund, their money would have grown substantially over the past 20 years, averaging about 14% annual returns. In some standout years, such as 2021, 2023 and 2024, the fund returned 31.5%, 18.4% and 27.3%, respectively.

The other option, taking a portion of the fund reserves and placing it in a stock market index fund, is not new. It was one of several recommendations proposed in a federal panel, the Social Security Advisory Council, in 1996.

Had we adopted those proposals in the 1990s, or even in 2005, as suggested, the trust fund would have been far richer today, alleviating the need for panic.

Since then, the reserves have slowly been depleting. They peaked at approximately $2.908 trillion in 2020, declining to approximately $2.721 trillion in 2024, a depletion of approximately $187 billion in just four years. Consequently, immediate action is required.

New York’s flush pension fund has grown exponentially more than the Social Security fund. That’s because its sole fiduciary, the state comptroller, diversifies the fund’s investments. Bonds constitute a mere 22.07% of the overall assets, and real estate investments diversify the portfolio even more. Despite investing 57% of the fund in equities, the state has never reached a point where the fund was in jeopardy. The rates of return for the New York Pension System from 2005 to 2025 were relatively healthy, at 4.2%, as opposed to 2.2% from Social Security. In 2023-2024, the fund brought in a more than 11% return.

A typical portfolio adviser will recommend that senior citizens place the majority of their money in safe bonds but have at least some funds in higher-growth options to expand the aggregate while hedging against downturns. That’s the route our government should take. Even if we had started with just 25% of the trust funds invested in a Standard and Poor’s index, it would solve many of the problems plaguing the system.

Steve Levy is executive director of the Center for Cost Effective Government, a fiscally conservative think tank. He served as executive of Suffolk County, New York, as a New York State Assembly member and as host of “The Steve Levy Radio Show.”

Fiscal Hawks Should Push for Balanced Budget, Not Debt Ceiling

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the united states capitol building with giant one hundred dollar bills filling the sky above

Steve Levy By Steve Levy Friday, 03 January 2025 12:42 PM EST Current | Bio | Archive

The most recent budget extension drama played out on Capitol Hill highlighted the continued controversy revolving around the debt ceiling.

If we as a nation are to solve our enormous debt and spending dilemma, we must first understand what the debt ceiling is — and is not.

The mainstream media and elected officials on both sides of the political aisle have often given the public a false impression of what the debt ceiling votes actually do.

The common misconception is that a vote to increase the debt ceiling is a vote to spend more tax dollars. It is not.

The Department of Treasury website confirms this quite clearly:

The debt limit does not authorize new spending commitments. It simply allows the government to finance existing legal obligations that congresses and presidents of both parties have made in the past. Failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations — an unprecedented event in American history that would precipitate another financial crisis and threaten jobs and savings of everyday Americans.

In other words, voting to raise the debt ceiling does NOT increase spending, and voting against it does NOT rescind any spending.

The spending was already authorized by previous votes of Congress.

A default on paying our debt would obliterate our standing as the safest currency in the world. That would have worldwide investors running for the exits and taking their money out of American markets and institutions.

So why has there been so much controversy about the debt ceiling in the past? It’s because many members of Congress fear that a vote to raise the debt limit would be interpreted by the folks back home as voting for more reckless spending.

And there are others, less concerned about the fiscal imagery, who wanted to hold their vote out as leverage to modify the budget to their liking.

President-elect Donald Trump preferred the debt ceiling matter be pushed out several years for two reasons.

First, he knew that, come March, the issue would be in his lap, and he is reluctant to give the appearance that he would be spending recklessly by supporting the raising of the debt limit (something he understands has to be done for the government to continue to function and to prevent America’s default).

But he was also leery of giving Democrats leverage to hold out on extending the debt ceiling next year unless they get their goodies included within the budget.

If the debt ceiling is handled through the reconciliation process, which is doable, that would only require 50 votes in the Senate, rather than the traditional 60 that relates to nonfiscal matters. Doing the math, the Republicans would not need Democratic votes, but that’s assuming the Republicans can hold together. No guarantee.

Trump loathes the optics of having the GOP extend the ceiling while the loyal opposition votes a resounding no, all the while seeking to label their conservative counterparts — who railed against raising the ceiling in the past — as hypocrites.

Democrats are split on the issue. Some of the biggest spenders, such as Elizabeth Warren, want to do away with the ceiling altogether so that they can continue to spend like drunken sailors without giving the other side leverage to force cuts.

Yet, other Democrats want to maintain the debt ceiling vote so that they themselves can hold out in order to get more spending into the budget when the Republicans take control of both houses and the presidency.

Debt ceilings have been meaningless since Congress pays no heed to them when they’re preparing their spending plans. They would spend whatever they wanted, knowing that down the line they would be forced to expand the debt ceiling to whatever level was needed to accommodate the increased spending they authorized months earlier.

So why continue to go through the charade every year? Both Trump and Warren are correct in wishing to push out these debt ceiling votes far out into the future, though for different reasons.

Ultimately, it’s the votes that are cast in developing the annual budget that count. Thus, if conservatives want spending controlled, the answer lies in enacting a balanced budget amendment.

Every state and local government around the country by law must balance their budget. The federal government is the only public entity that does not. That should end immediately.

As noted in our Center for Cost Effective Government’s white paper on spending caps, these spending limitations work. They force prioritization.

The fiscal hawks within the Republican caucus should seek the ultimate deal of getting rid of the debt limit charade by linking it to a requirement that a balanced budget amendment be enacted.

Elon Musk and Vivek Ramaswami may come up with buckets full of logical spending cuts, but they don’t have the authority to implement them. A balanced budget requirement would force many of those cuts to be implemented by a recalcitrant big spending Congress.