by A. Altieri D’Angelo
As expected, Republicans in the House of Representatives (House Republicans) are blackmailing the Biden Administration by refusing to raise the debt limit (the Limit). However, President Biden and the Democratic Party (the Party) can defeat the Republican’s plan and set the stage for a successful 2024 election cycle.
The Limit is a threshold that prevents the U.S. from incurring debt above $31.4 Trillion. Unfortunately, on January 19, 2023, the Limit was reached, causing the U.S. Treasury to take extraordinary actions to prevent the government from defaulting on its debts. The silly thing about this mess is that solution is well-known and very easy to implement; Congress must agree to raise the Limit.
The House has increased the Limit under every President since Herbert Hoover (1929-1933). The debt ceiling, or Limit, was raised 90 times in the 1900s and approximately 20 times since 2000. But the Republicans have, from time to time, tried to use the need to increase the Limit to force drastic cuts in federal government spending. MAGA Republicans are driving the latest attempt in the House.
President Biden is refusing to enter into negotiations with House Republicans. He insists that there should be no negotiation since the Limit is intended to deal with obligations previously approved by Republicans and Democrats. He has also pointed out that House Republicans agreed to raise the Limit each year that Trump was President, and Trump incurred one of the highest increases in national debt (@3 Trillion) in U.S. history.
A failure to raise the Limit would have a catastrophic impact on the U.S. and the worldwide economies. All social program payments such as Medicare and Medicaid funding would stop, interest rates would increase significantly, and no federal government employees would be paid. A default would seriously undermine the credibility of the U.S. Dollar as the world’s reserve currency, and a deep recession would occur. The list goes on and on.
In 2011, Republicans in the House created a similar crisis. There was no default, but the uncertainty caused by that unhinged effort to force cuts in government spending destabilized the stock market, and stock prices dropped. People’s pension plans suffered a significant loss in value. It took several months for the economy to recover, rating agencies downgraded U.S. debt, and interest rates went up.
House Republicans insist the U.S. reduce its spending. They seek to cut (among other things) the core social programs that most retired people depend on, such as Social Security, Medicare, and Medicaid, as well as military and climate change spending. Republicans argue that Biden’s Infrastructure Bill and the Chips Act were examples of wasteful spending.
But that did not stop these same members from telling their constituents that they brought additional government funding to their districts even though most Republicans voted against such spending programs. But House Republican hypocrisy offers Biden and the Party a golden opportunity to gain support among independent and moderate voters.
President Biden should agree to speak to McCarthy (Speaker of the House) and show that he is the grown-up in the room. He should allow McCarthy to disclose the House Republican demands publicly. Then he and the Party should take that list and go back to their districts and explain in detail what such cuts would do to voters and their families.
They should focus on how the elderly and disabled will suffer from the proposed cuts. They can also look to President Trump for support. President Trump sent out a two-minute video in which he stated, “Cut waste, fraud, and abuse everywhere that we can find it, and there’s plenty of it…But do not cut the benefits our seniors worked for and paid for their entire lives.”
(Trump was referring to Social Security and Medicare. He did not mention Medicaid because conservatives believe it is a form of socialism that should be abolished. Most people do not realize that more than 50% of Medicaid spending goes to seniors and people with disabilities.)
Seniors are a powerful force in the Republican Party, yet House members seek to cut their benefits. If Biden can make these voters realize that the House Republican plan will adversely affect them, he would then be able to create widespread support for raising the Limit without forcing spending cuts.
The key to success is to hold talks with McCarthy, play for time, and use the information provided by the Speaker to create a backlash against the Republicans. Voters will see that House Republicans do not care about their needs. This approach will not only defeat the blackmail attempt but also gain 2024 election support among moderate voters.
But Biden and the Party must communicate effectively and frequently with American voters.