There is only one other nation on earth with a budget ceiling. Denmark’s, unlike ours, is set so high that it has never triggered even the threat of a government shutdown. By contrast, since 1960 alone the United States has had 78 mini “crises” over a debt ceiling that is mentioned nowhere in the Constitution but was created in 1917 to make managing wartime economies easier. And we’ve had no end of wartime economies.
What is in the Constitution is Section 4 of the Fourteenth Amendment, which says unequivocally “the validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
“The validity of the public debt … shall not be questioned.” This is crystal clear: defaulting on public debts is unconstitutional. The sky would not fall and the world economy would not collapse if Republican hardliners had no way of holding Congress hostage. And yet the budget ceiling has become a semi-annual occasion for producing political theater and grandstanding.
The “deal” that the Biden administration has apparently negotiated with Kevin McCarthy, who serves at the pleasure of the GOP’s Freedom Caucus, is being portrayed as a necessary, pragmatic, “best possible” deal by the administration. “It could have been worse” is about the only excuse centrist Democrats can make for this shameful capitulation.
If fiscal responsibility was supposed to be the objective, not much effort was made to generate revenue by rolling back tax breaks for the super-rich or reducing debt by paring down the obscene, marbled fat “defense” budget. The military budget, which together with Homeland Security provisions is now well over a trillion dollars, historically accounts for a major portion of the national debt.
The debt ceiling talks ended in a deal that both the U.S. Chamber of Commerce and the National Association of Manufacturers praised — even as they called for even more austerity and a second course of regulatory rollbacks.
Instead, the Fiscal Responsibility Act (FRA) imposes (fiscal responsibility = austerity) on those not responsible for debt but who need government help the most. “Responsibility” is only for welfare mothers, not oligarchs, social media barons, agribusiness, the fossil fuel industry, or for defense contractors. Besides the cuts, the FRA places limits on discretionary spending for the next two years — yet none on military spending.
Over 80 programs, many of them social, are having their funding rescinded. Funding for the IRS — long in the GOP’s crosshairs — is also being hit. Pay-Go provisions will hobble government programs, where budget increases here must now be offset with financial cuts there. The Congressional Budget Office has prepared a 17-page summary of the FRA’s main features. Read it and weep.
FRA hits Brown and Black families the hardest, ending the student loan payment pause, adding additional work requirements to Temporary Assistance for Needy Families (TANF) program, impacting the Supplemental Nutrition Assistance Program (SNAP), and rolling back environmental protections for communities of color. NAACP President Derrick Johnson issued a statement:
Let’s be clear: while the original intent of the debt ceiling was to solve a practical challenge of paying the nation’s bills during World War I, it has become a weapon used by conservative extremists to hold the lives and livelihoods of Black America – and countless others – hostage. The NAACP calls on Congress and the Administration to end this practice before it can again be used to inflict more harm on Black America.
Progressive Democrats are justifiably unhappy with this gutless, immoral deal.
Among other missed opportunities, President Biden failed to show enough spine with Speaker McCarthy to stand on the Fourteenth Amendment and risk / provoke a revolt by the GOP Freedom Caucus, which would have both highlighted the GOP’s cruelty to voters and divided the GOP.
As for Biden’s hopes for a second term, his age is already a hard sell. But now the negotiator-in-chief has shown himself to be a weak and unreliable defender of America’s most vulnerable citizens. Biden has also dispelled any notion that he has moved to the left over the last two years. Whether Progressive Democrats will forgive him for this capitulation is not yet clear, but the bitter aftertaste of this budget ceiling negotiation will do him no favors in 2024.
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