I don’t know about you, but I was glad to see President Joe Biden and House Speaker Kevin McCarthy agree on the debt ceiling deal.
The House is expected to vote Wednesday on the legislation to avoid a federal default. The plan, dubbed the “Fiscal Responsibility Act,” would raise the debt limit to last another two years and hold non-defense spending at roughly the same levels next year as this year.
So, let’s see… we reached an agreement to pay our bills and not become a banana republic. Wait, with hoopleheads in Congress like Lauren Boebert, Jim Jordan and Marjorie Taylor Greene, are we sure we aren’t already a banana republic?
As you might expect, both Biden and McCarthy are doing plenty of spinning to claim victory, but they can’t brag too much because each needs votes from the other side to get this through Congress. The spin-doctoring is one way to sell the deal to their respective parties as extreme factions on both sides are already voicing their disapproval. McCarthy is saying the Democrats got nothing while the Republicans got everything they wanted. Biden is saying he compromised on the debt ceiling but not the budget. The details:
- The defense budget will remain flat this year and increase by 1% next year. That’s $886 billion in security spending and about $703 billion in non-security spending. These were all numbers Biden wanted.
- There will be caps on total annually appropriated domestic spending for 2024 and 2025, set at $704 billion (though funding for veterans will see an increase), which means it won’t keep up with the rate of inflation. Republicans had wanted spending caps for a decade, plus $130 billion in cuts to domestic spending. They got neither. The only spending cuts in this deal involve annually appropriated spending for things other than defense. That’s only about 10% of all federal spending. What we don’t know: what cuts will hit which individual agencies and programs. That will depend on the details of appropriation bills still to be written.
- $20 billion of the $80 billion the Internal Revenue Service designated to go after tax cheats will be diverted to other domestic spending over the next two years. That’s not spelled out in the 99-page compromise headed to Congress. It was a verbal agreement between the two negotiating sides.
- The money Biden won for infrastructure, climate change (included in Democrats’ signature climate law last year) and semiconductor advancements survive intact. And Biden got to keep his plan to cancel up to $20,000 of student debt for tens of millions of Americans. Republicans got an expedited permitting process for energy projects (which means fewer paperwork requirements for energy companies).
- Most of the unused money for COVID funds will be redirected to other domestic spending. Work requirements for single, nondisabled people who receive food stamps will increase from age 49 to 54. But there are no new work requirements for Medicaid.
- The main drivers of the federal deficit, Medicare and Social Security, remain untouched. The agreement also does nothing to close tax loopholes or raise revenue, as in no tax increases, so no rescinding of the Trump administration’s tax cuts, which increased the existing federal deficit by more than 30%.
- Something everyone can celebrate: We won’t have to watch drama queens go into their usual theatrics until January 2025, meaning it won’t be a hotbed issue heading into the 2024 election.
- But after that election, the heavy lifting starts all over again. Distractions will begin anew over the debt limit, spending priorities and, pending who controls the levers of power, taxes. Most of the provisions in Trump’s 2017 tax cut expire in 2025.
- What about a recession? Economics 101 would tell you less federal spending means less money pumped into the economy, means slower growth in the American economy for the next two years (perhaps by about .1 or .2 percentage point), but far too many other factors are in play: the lingering effect of the Federal Reserve’s interest rate hikes, inflation, consumer spending, job numbers, jobless claims, wage growth and energy prices. One certainty: The debt deal removes a major cloud over the economy and financial markets. It’s one less thing to worry about.
If the deal passes. Some Democrats have voiced their disapproval over parts of the legislation, namely the expanded work requirements for food stamps. But no Democrats have said they want to undo the deal. Their approach is more pragmatic since the agreement delivered far less than what Republicans wanted, Rep. Jim Himes (D-Conn.) noted during an appearance Sunday on Fox News.
Extremists in the House Freedom Caucus, however, went into various states of apoplexy, promising to do whatever it takes to torpedo the legislation, which would cause a default. You don’t hear any Democrats threatening to scuttle the deal, but that’s the MAGA crowd for ya. If they don’t get 110% of their demands plus a Swedish massage and a year’s supply of Bubble Yum, they consider it a loss. Heck, they were already rabid even before any deal was struck.
Show of hands: Who else is tired of politicians with their day-to-day drama wreaking havoc on the nation’s emotional welfare? It’s all just so they can preen and do the chicken dance trying to prove who has the most pull in the game of Look At Me! Look At Me! Yeah, we’re looking, all right, and you look like an idiot. Again.
All these theatrical histrionics do is put urgent legislative priorities on hold. The semi-regular “debt crisis,” so-called, is something that can always be hashed out during a normal budget and appropriations process, yet it never is. It’s the government living paycheck to paycheck when it doesn’t need to. Is it any wonder that China’s narrative about America being a broken government is picking up significant steam around the world and at home?
Meanwhile, I see the GOP held out for their primary donors: tax cheats. Their lack of comprehension is simply beyond comprehension. They give huge tax cuts to businesses and the wealthy, thus starving the government of revenue it needs to pay its bills. Then, at debt ceiling time (and only when a Democrat is in the White House), they yell, “Cut federal spending!”
These are two sides of the same coin. They conveniently forget that government needs to have revenue to pay its bills yet deny it the revenue it needs to pay them while also harping about money going to the IRS to do the job of collecting that revenue.
Well, thank goodness this deal protects the very rich while the rest of us get to step up yet again and sacrifice for the greater good. Sure, I’ll push my retirement age back. I’m a trouper! I’d love for Elon Musk to afford a third helicopter that he can write off as a business expense!
Do Republicans not want the nation’s tax agency to do its fundamental job? They seem to forget that fiscal conservatism requires paying the bills. Families cut back on expenses when bills are high, they tell us. Bills can be high if you spend too much, but they can also look higher to a family when breadwinners take a pay cut. Tax cuts for the wealthy are a pay cut for America. Bad enough to cut America’s salary, they want to cripple the single entity that collects the money to pay those bills. Tax law for thee but not for me. Holding wealthy people accountable is expensive, but that doesn’t mean they should be above the law.
How can Republicans make such a fuss over work requirements for the poor — an item that will save the least amount of money — while pulling funds for the IRS to catch wealthy tax cheats, which would reduce the deficit?
Nonetheless, it’s a good sign that neither the extreme right nor the progressives on the left (whom I hardly consider extremists) dislike the deal. It shows that the process works as intended. To far too many Republicans, not getting everything they asked for is utter capitulation, but a compromise that has critics on both sides is usually a good one for most people. Not that the MAGA cult cares about “most people.”
The agreement also illustrates Biden’s governing style, cultivated over a long career in the Senate: negotiation, compromise and bipartisanship. The speaker should take a hint and recognize that the strength of his office is in developing bipartisan relationships that are good for most Americans while harming the fewest number of them. In other words, governing.
McCarthy should take this opportunity to work with Minority Leader Hakeem Jeffries and the moderate Democrats and coax the moderate Republicans out of hiding to do what they’re paid to do: govern. Let the extremists in the House sulk. They’re not creators of genuine policy, they’re disruptors.
The “my way or the highway” mentality needs to stop, but it’s all the GOP knows. We didn’t compromise in 1861. How did that turn out?
Voters should also appreciate Biden’s low-key style. Marketing and self-promotion have never been his strengths. My friend Dave imagined a scenario in which Biden took a page out of the Trump Ego Booklet:
“It was me. I made the deal. Only I, and I alone, could make this deal. This is the best deal in the history of deals. They said it couldn’t be done. But I got it done.”
One wonders if Biden’s approval numbers would be far higher if he were a better salesman.
And what of our two presidential front-runners in Republican Land?
At this writing, Donald Trump hadn’t said a word yet about the deal, but he’s in a bit of a pickle. The Trump-loving “Make America Great Again” crowd hates it, but he backed Kevin McCarthy for House speaker. Ah, white-people problems!
And then there’s Florida Gov. Ron DeSantis, who prefers to default, which would hammer financial markets, cause a recession, crash the dollar and put millions of people out of work. You know, Republican Economics 101.
“Prior to this deal,” DeSantis said, “our country was careening towards bankruptcy, and after this deal, our country will still be careening towards bankruptcy.”
Maybe someone should explain to him that the definition of involuntary bankruptcy is when the debtor — that’d be the U.S. Treasury in this case, Ron — is not paying their debts, which is exactly what would happen if the deal doesn’t pass and the U.S. government goes into default. Don’t worry. I’m sure there’d be no impact on Florida’s economy if all the Social Security payments stopped.
Are we sure we’re not a banana republic?
The Democrats may not have gotten all they wanted, but “most” is better than “none.” The radical MAGA blowhards, on the other hand, who have spent weeks telling us how they were going to stick it to Biden, now have to choke on the deal he and McCarthy forged. It’s a far bigger win for Biden than it is for the MAGA crowd. Biden realized, as I suspect House Democrats will realize, that the GOP was crazy enough to actually shoot the hostage. Case in point, this unhinged tweet about the deal from a radio host who’d love for us to mention his name:
Sell-Out! This is the biggest, worst most despicable sell-out of our base in Republican history. WE GOT NOTHING! WTF was the point of the bill we passed? It was a con-job. They think we are freaking stupid because we work for a living. Now they’ll pass it with RINO and DEM votes! And they gave Biden a 2-year blank check! We need a GOP political revolt-1. Vacate McCarthy ASAP. 2. Primary every Republican who votes for this in ’24 with all we’ve got. We’ve been lied to, misled and played like dumb-shits. Their SPIN is pathetic. We’re done with this.
He seems triggered. Should we offer him a safe space?
Sometimes the best thing about the MAGA chumps is the hissy fits they throw. But, like anything else, 10% of your people are 90% of your problems. Or, as Becky Chambers put it in “The Long Way to a Small, Angry Planet,” the first book of her Wayfarer series:
“Ninety percent of all problems are caused by people being assholes.”
“What causes the other ten percent?” asked Kizzy.
“Natural disasters,” said Nib.
Don’t quote that book too loudly. DeSantis might try to ban it.