The Morning Journal (Lorain, OH)
On raising the debt ceiling
Raise the debt ceiling, and invest in America
The United States is fast approaching the debt ceiling, an arbitrary and arcane cap on how much the government can borrow to pay its bills. If the ceiling doesn’t get lifted periodically, the country defaults and catastrophe follows.
But now, congressional Republicans who repeatedly raised the ceiling under Donald Trump refuse to raise it under Joe Biden unless Democrats agree to devastating cuts to federal programs. They’re taking us all ransom to inflict suffering on the families who’ve done the least to drive the national debt.
While negotiations continue to resolve the impasse, it’s crucial to understand what’s at stake — and why investments in the well-being of American people must be the goal of any debt or budget negotiation.
House Speaker Kevin McCarthy’s plan, “The Limit, Save, Grow Act,” was created behind closed doors, outside of regular order. It’s not a serious bill.
It proposes temporarily raising the debt ceiling in exchange for permanently lowering the ceiling on the American dream for all but the very wealthiest of us. The extreme cuts and caps it would impose over the next decade would all but end every human needs investment over the next decade.
Understand this: The primary drivers of the national debt have been unfunded wars and the Bush and Trump tax cuts for the rich. If McCarthy wanted to reduce the debt, he could simply pass President Biden’s proposed budget, bringing down the deficit while investing in American families simply by taxing the ultrarich fairly. Instead, the McCarthy plan would make the 2017 Trump tax cuts for the rich permanent — at a cost of at least $300 billion per year. That’s not fiscal responsibility — it’s a handout.
Worse still, McCarthy would make up the difference by slashing programs that provide Americans health care, put food on tables and roofs over heads, help workers get child care, make college more affordable, and much, much more.
These programs aren’t driving the deficit. The reality is that government investment in families remains 10% below what it was in 2010, according to the Coalition on Human Needs, thanks to the last disastrous debt ceiling deal in 2011. Inflation has only made things worse — and McCarthy’s plan is even more extreme.
The Republican plan also calls for more work requirements for people to get federal help. But the assumption that people who get assistance don’t work is false. Most recipients of programs like SNAP and Medicaid are either employed or looking for work. Most of the rest are taking care of family members, attending school or undergoing medical treatment.
Those who do work often need help in the first place because wages are low, child care is expensive, and this country doesn’t guarantee paid sick leave or a livable minimum wage. Federal support for income, health care and child care makes it possible for these people to work at all. Taking away assistance if one can’t meet strict work requirements only makes finding a job more difficult, according to the Center on Budget and Policy Priorities. And if Republicans go ahead and default, an additional 8 million jobs could be destroyed.
At a time of rising rents, high food prices and inflation, this country needs to do more to help people make ends meet, not less. The debt ceiling is an arcane artifice without a real connection to the economy. But how well we invest in our families and workers directly relates to it.
If we invest in child care, people can work. If we have paid sick leave and family leave, they can tend to themselves and their loved ones and not lose their jobs. When we have quality, affordable health care, our lives are happier, healthier and more productive.
When our children are fed and housed, they experience better health, education and employment outcomes that last a lifetime. And a well-educated society produces thriving workers and families.
We must reject the Republican plan to bully the rest of us into accepting that only the rich deserve help. Congress should lift the debt ceiling with no preconditions. Lawmakers worried about future debts should fairly tax corporations and the ultra-rich and right-size our bloated Pentagon budget.
Then get on to the real business at hand — raising the ceiling on the American Dream for the rest of us.
Raise the debt ceiling, but cut spending, too
What will happen with the debt ceiling is the most significant political story of the last few months. President Joe Biden demands that Republicans acquiesce to a “clean” debt limit increase. At the same time, Republicans seek lower spending to address the worsening national debt.
We should do both.
The debt limit must be raised, and we should not jeopardize the full faith and credit of the United States by playing unnecessary games. But the president’s view that we’ve never used such moments to reorient the federal budget is inconsistent with history.
Debt ceiling fights aren’t new, nor are budget deals in their aftermath. In fact, every single major deal from the last four decades has come out of a fight over the ceiling, including the Budget Control Act spending caps after 2011’s “fiscal cliff,” the agreement in 1997 between former President Bill Clinton and the Republican-controlled Congress, and the Gramm-Rudman deal in 1985.
And the country’s current path looks worse than any of those times. The Congressional Budget Office’s latest budget outlook now predicts a deficit of more than $1.5 trillion in 2023, which could be even higher. The CBO also estimates that the United States’ public debt-to-GDP ratio — the best measure of the country’s debt burden — will be nearly 120% in just 10 years, more than exceeding the World War II highs. With one of Medicare’s trust funds forecast to be bankrupt as soon as 2028, our fiscal situation is growing dire on multiple fronts.
It’s a far cry from where we were at the turn of the century. In 2000, before the pandemic, the 2008 financial crisis, and multiple wars in the Middle East, the CBO expected surpluses as far as the eye could see. But no longer.
The debt limit isn’t anyone’s idea of an excellent way to run a nation’s finances. We should replace it with a fiscal rule like those used in developed countries and some U.S. states. These rules limit spending based on expected tax revenue while allowing borrowing when necessary.
The evidence is strong that they would promote responsible fiscal outcomes without creating the dire situations that have become common with the U.S. debt limit.
After all, the debt limit wasn’t meant to be used this way. The ceiling was created during World War I as a way for the Treasury Department to issue debt without congressional permission. In other words, its goal was to allow for more debt, but today it is ironically one of the few checks we have on government spending run amok.
But the debt limit is the system we have, and both parties should use it to our advantage and right our fiscal ship. Because it’s long become clear that we must address the spending problem at the core of the national debt.
Over the last three years, Presidents Biden and Donald Trump spent at a record pace and accelerated the national debt. The $5 trillion in response to the COVID-19 pandemic blew up the federal budget, and that says nothing of all the other spending that also increased or otherwise is on autopilot.
For this reason, Speaker Kevin McCarthy and House Republicans should be applauded for how quickly they — together with persistent inflation — have changed public discussion on this topic.
It didn’t look like it was going to be this way. McCarthy has a long record of supporting big-spending legislation, and Republicans didn’t exactly look like they had an interest in being fiscal warriors during the last Congress.
But McCarthy’s contentious speaker fight seems to have empowered him and engaged more Republicans in the party’s decision-making process. Surprisingly, McCarthy succeeded in getting his party to coalesce behind the Limit, Save, Grow Act, throwing the ball back into Biden’s court. And Biden has since changed his tune. After meeting with McCarthy and other congressional leaders, Biden told an audience in New York that “we should be cutting spending.”
It’s a far cry from the tune the president was singing just a few weeks earlier, and all Americans should be enthused and relieved.
Let’s hope negotiations continue so that both parties can do what’s right for the country for once.