The party for whom lying has become a core principal has done it once again. This time the topic is what is actually in the toxic bill that narrowly passed the House of Representatives in late April that links support for a debt ceiling increase to draconian spending cuts. The Sunday talk shows are overflowing with Republican House members spouting blatant untruths about the bill they are advancing in an attempt to undermine the U.S. and global economies and destroy millions of lives.
Failing to raise the debt ceiling means that the U.S. will default on its obligations to pay for goods and services it has already received. The Full Faith and Credit of the U.S., the linchpin of the global economy for more than a century, will go down the toilet. The practical effects of this titanic Republican recklessness will be:
- The government will not have the money to meet its financial obligations.
- The government won’t be able to borrow in order to pay for entitlement programs such as Social Security, Medicare and Medicaid, as well as all domestic discretionary spending programs, including those that fund veterans programs, law enforcement and border security, all of which Republicans claim they strongly support.
- The bill rescinds nearly $71 billion that Congress is providing the IRS to upgrade its technology and boost hiring in order to increase tax revenues (and thus decrease the deficit). The nonpartisan Congressional Budget Office says such a rescission would actually increase deficits by $120 billion.
- It repeals clean energy tax breaks while leaving those directed at fossil fuels in place.
- Interest rates will rise, adding to inflation and accelerating the slowdown currently affecting the economy. Mortgage rates and borrowing costs for government, businesses and individuals will go up.
- It expands work requirements for federal cash and food assistance recipients, which would result in several million families in need being thrown off Medicaid and food stamps.
- The stock market will likely plummet, wiping out millions of retirement accounts and savings.
- As bond values decline, more banks will be in trouble, further exacerbating market panics and volatility.
- The possibility of recession will become a reality.
- Millions of Americans will lose their jobs.
This is not a complete litany of the disasters to come if the debt ceiling is not raised.
Hypocritically, the bill exempts defense spending from any cuts despite the fact that the U.S. spends more on defense than the next ten biggest defense spending countries combined. We spend more than four times what our major adversary no. 1, China, spends for defense, and more than 20 times what our major adversary no. 2, Russia, spends. Leaving defense spending out of the mix demonstrates the unseriousness of the Republican approach. It is nothing more than yet another bit of performance art brought to you by the extremist right wingnuts who have taken over the party.
The Republicans would suspend the debt limit only through March 31, 2024 or by $1.5 trillion, whichever comes first, at which time we will be right back where this insanity all began. Another debt ceiling fight is guaranteed.
The U.S. and Denmark are the only countries in the world that have a debt ceiling. Given the lunacy that has consumed the Republican Party, the best medicine would be for Congress to eliminate the debt ceiling altogether. Of course, this would require that the 2024 elections punish Republicans for their rash behavior so that the only sane party left can get something like this passed.
The reality is that there is no guarantee that the public will blame Republicans for an economic collapse. The GOP calculus is that they won’t because recessions are invariably viewed as the fault of the sitting president. They will say that they passed a debt ceiling bill that Democrats refused to consider. What is actually in that bill will likely not be processed by most voters. In other words, Republicans are perfectly willing to countenance economic disaster in return for an election triumph.
Thus far, Biden appears unwilling to invoke Section 4 of the 14th Amendment to the Constitution, which states: “The validity of the public debt of the United States, authorized by law, …shall not be questioned.” While the language seems to support forging ahead and continuing to pay our debts despite any debt ceiling, Section 4 has never been tested in the courts. This would certainly go to the Supreme Court. Best case: the Court would declare the debt ceiling unconstitutional in contravention of Section 4. Worst case: the Court would uphold the debt ceiling despite Section 4. In the meantime, the U.S. would have avoided an imminent default and resulting economic chaos. The administration has nothing to lose in either case.
May 5, 2023