President Biden said it well when he called House Speaker Rep. Kevin McCarthy’s (R-Calif.) demands to gut the U.S. safety net or force a federal default “wacko.”
Whatever word for it you use, McCarthy and his caucus are holding American families, the full faith and credit of the United States and the global economy hostage to his demands to slash the programs that most of us rely on.
The debt limit is an arbitrary congressional cap on how much the federal government can borrow to pay for its debts — debts Congress incurs with its own taxing and spending decisions. If Congress votes to spend more than it votes to tax, then the federal government legally must borrow to cover those bills. So if the limit isn’t raised periodically, we default.
McCarthy likes to compare raising the debt ceiling to parents raising their teenagers’ credit limit after they’ve maxed out a credit card. But by refusing to just raise it, what he’s really advocating is running up that bill and then not paying it. He’s the one behaving irresponsibly.
Make no mistake — this isn’t about debt.
McCarthy and Republicans in both the House and Senate voted three times under Trump to raise the debt ceiling — and even to suspend it — in order to rack up nearly $8 trillion in debt, including about $2 trillion for tax cuts to the wealthy and big corporations. Although bipartisan spending has contributed to the national debt over the years, on partisan votes it’s actually been Republicans who’ve voted to add more to the national debt than Democrats.
President Biden, by contrast, reduced the annual deficit in 2022, and his 10-year budget plan for the next fiscal year would lower the national debt by $3 trillion while more robustly funding the programs so many of us rely upon. This is because, unlike the GOP plan, he includes revenues from fair taxation for the nation’s wealthiest.
That gets closer to what this is really about.
Biden wants the wealthy to pay their fair share to fund social programs that address ever-deepening inequality — while also reducing deficits and debt. If McCarthy simply voted for that budget, he’d reduce the debt. Instead, Republican lawmakers on Capitol Hill refuse to raise the cap unless underfunded programs — for health care, food and housing, education, veteran’s health and Meals on Wheels — are slashed to make way for even more tax cuts for the already very wealthy.
According to the Center on Budget and Policy Priorities, McCarthy’s “Limit, Save, Grow Act” demands the following as ransom for the full faith and credit of the United States:
- Leaving many more veterans, families and elderly people homeless, hungry and unable to access health care or college.
- Eliminating tens of thousands of teachers and hundreds of thousands of Head Start and child care slots.
- Increasing interest on credit cards, car payments and mortgages, while preventing any student loan relief.
- Scaling back tax incentives for green energy and making it easier for oil and gas companies to pollute.
- Making it easier for rich folks to cheat on their taxes.
This is simply no way to run an economy, serve our people or be a responsible global partner. It’s a formula for the opposite.
The package is dead on arrival in the U.S. Senate — and indeed may not ultimately get enough votes in the GOP-controlled House. Yet it stands as a stark warning for what could follow if more extremists with a dangerous disregard for governing come to power.
The debt ceiling should be abolished. It has no connection to the real economy and it’s of no use except as a weapon to take the government hostage. McCarthy’s faction couldn’t care less about the debt ceiling when it comes to unfunded wars, tax cuts for the wealthiest and ballooning the Pentagon budget. But let it be about doing their job and keeping the rest of us afloat and they go into full fiscal terrorist mode.
But if the ceiling can’t be abolished, it must be raised as required by the Constitution — without conditions. McCarthy and his cadre should be pressured to immediately pass a clean new debt limit. Anything else is just “wacko.”
Karen Dolan is a fellow at the Institute for Policy Studies.