Debt deal prevents crisis — this time
On Wednesday, the House voted to raise the debt limit, thereby avoiding sending the United States, and potentially the world, into economic catastrophe.
The agreement worked out between President Joe Biden and House Speaker Kevin Mccarthy ends months of contentious debate over something that should have been pro forma. This is spending that has already occurred.
Raising the $31.4 trillion debt ceiling allows the government to continue borrowing money and pay its bills.
The agreement will lead to a reduction in spending of about $1.5 trillion over a decade, the Congressional Budget Office has estimated. It will freeze some funding next year and will limit spending to 1 percent growth in 2025. But it also increases spending for the military and veterans programs.
Any deal requires compromise, and those made by Biden and Mccarthy rankled House members on the far right and left.
“The agreement represents a compromise that means no one got everything they want, but that’s the responsibility of governing,” Biden told reporters.
Mccarthy has framed the agreement as a small step in the march to rein in spending, saying, “We’re finally bending the curve on discretionary spending because of this bill, and we’re doing it while at the same time raising our national defense and our veterans fully funded, with Social Security and Medicare preserved.”
But U.S. Rep. Chip Roy, a Republican who represents part of San Antonio, had a much different take. “It’s not a good deal,” he tweeted. Roy, like several of his GOP colleagues, bristled that the deal does not more dramatically cut spending. It also does not fully rescind additional funding for the IRS, and it does not feature work requirements for Medicaid.
These are key points for the House Freedom Caucus.
But progressive House Democrats such as freshman U.S. Rep. Greg Casar, who also represents part of San Antonio, expressed frustration that the deal imposes tougher work requirements on beneficiaries of the Supplemental Nutrition Assistance Program, or SNAP.
It also, notably, expands potential
eligibility for SNAP by creating exemptions for the work requirements for veterans, people experiencing homelessness and those who have aged out of foster care.
That the agreement is imperfect and dissatisfying to politicians on both sides of the aisle is a reflection of compromise. To focus on how the agreement falls short fails to see the larger picture. And on this front, an overwhelming majority of bipartisan lawmakers — the vote was 314-117 — understand the significance of default. Failure to reach a compromise would have been disastrous, with the impact extending far beyond our shores. Defaulting on our debt could have sparked a recession while pushing international markets into a crisis.
Mercifully, we won’t have to go through this unnecessary charade next year since the deal suspends the borrowing limit until January 2025. This means it won’t be used as a pawn during the 2024 presidential election.
Whatever celebrations, if any, ensue from this compromise, there will be buckets of cold water to splash on the positive vibes. This may signal the end of the latest battle, but the war will continue. A future debt ceiling fight might not occur for at least two years, but it is as inevitable as the arrival of the cherry blossoms every spring in Washington.
It is more than likely, especially if government remains divided, the country will teeter on the brink of default again with old animosities re-emerging.
But if we are to be honest about spending and debt, then we must also be honest about taxes. No politician wants to raise taxes, but the reality is that the deficit has only grown with the Trump tax cuts of 2017. These, too, should be revisited when the debt ceiling crisis renews (or sooner).
But that requires a bipartisan fortitude that has largely been lacking.
The compromise is imperfect, but it gives the nation a reprieve