The Debt Ceiling Is a Chance to Raise America’s Growth Ceiling

Hidden in the debt-ceiling debate is a profound question that affects every American: Is our economy doomed to slow growth and even stagnation? Remarkably, there’s a new bipartisan consensus that answers, resoundingly, no.

In recent weeks, virtually everyone in Washington has rallied around a crucial, pro-growth policy: streamlining the government permitting process that has slowed, and often stopped, virtually every energy project. House Republicans included permitting reforms in their debt-ceiling proposal, and moderate Democratic Sen. Joe Manchin (W.Va.) is pushing for his own reform in negotiations. Now the Biden administration is backing a speedier process, and while the White House is calling for a stand-alone vote on this policy, it’s increasingly likely that permitting reform will be the key to a debt-ceiling deal.

There’s a reason this issue has come to the fore. Everyone — left, right and center — understands that energy in whatever form is the essential ingredient for economic growth. Yet, environmental reviews have stifled many energy projects large and small, dragging out everything from pipelines to power plants for an average of five years or more. This permitting purgatory is directly responsible for much of the slowing growth — and rising frustration — that Americans have felt over the past 50 years.

It didn’t used to be like this. Americans once honestly believed an abundant future was just around the corner. When the chairman of the U.S. Atomic Energy Commission said in 1954 that “it is not too much to expect that our children will enjoy in their homes electrical energy too cheap to meter,” people assumed he was telling the truth. And he was. In the 20 years ending in 1969, America enjoyed average economic growth of more than 4%, driven by unprecedented innovations — all fueled by energy. Rich and poor Americans alike were filled with excitement, even expectation, for continued progress.

Then we began to give up. There are many reasons, but among the biggest was Richard Nixon’s landmark National Environmental Protection Act (NEPA). Although well-intentioned, NEPA quickly became a tool to delay and ultimately deny Americans the progress we once thought inevitable. Even the Council on Environmental Quality, which advises the president on environmental policy, acknowledged nearly 30 years ago that “NEPA takes too long and costs too much.”

The results? Consistent declines in economic growth. On average, growth in the 1970s, ’80s and ’90s was one-third slower than it was in the two decades prior. Since the start of the 21st century, growth has been less than half what it was. Think what that means: We could be making twice as much progress, twice as fast, as we are right now — leading to soaring wages, better standards of living and even more innovations that improve our lives. Instead, we’ve settled for slow growth and stagnation, fighting with each other and not for a better future.

In fact, most Americans have lost faith that such a future exists. Recent polling by my organization shows that only 16% of the country thinks that someone born 200 years from now will have a thriving and fulfilling life. A greater share of our fellow citizens think you are more likely to succeed if you were born 200 years in the past. They’ve lost the belief that we can do what we did just over 50 years ago: Turn the impossible into the inevitable.

This brings us back to the debt ceiling debate. Admittedly, none of the proposals — from the House GOP, Manchin or the Biden White House — will bring back the past, when the future was unimaginably awesome and eminently achievable. But they do show a willingness to rethink how we understand and pursue growth and prosperity. Even modest reform will help us reject the view that the best we can do is manage our nation’s decline, and instead accept that we can marshal a new rise in American fortunes.

This transformation of our spirit starts with a new conversation — one we haven’t heard in Washington for a long time. Let’s move beyond talking about approving this pipeline, building that power plant or thinking that shortening permit approval times is the ultimate victory. Instead, let’s start talking about the incredible growth we threw away, the unbounded optimism we used to have and the unprecedented innovations we once thought were possible. The debt ceiling debate may be the time when we give ourselves permission to grow again.

CGO scholars and fellows frequently comment on a variety of topics for the popular press. The views expressed therein are those of the authors and do not necessarily reflect the views of the Center for Growth and Opportunity or the views of Utah State University.