House Speaker Kevin McCarthy (R-Calif.) has said boosting U.S. competitiveness with China is a top priority for his speakership, but his actions so far have signaled his willingness to put partisanship ahead of national security. While he created the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party (CCP) and met with Taiwanese President Tsai Ing-wen, McCarthy has been orchestrating a potential self-inflicted wound that puts America’s strength and global stature at risk. Nothing would be more devastating to the United States’ global leadership, or more helpful to China’s ambitions, than unleashing an economic catastrophe by defaulting on the Treasury’s debt. Jan. 6, 2021 was Xi Jinping’s best day in office. Make no mistake, he’s now watching how we handle our economy with similar bated breath.
McCarthy keeps comparing the debt ceiling to “giving your child a credit card — and they charge it all the way up.” But the debt ceiling has nothing to do with how much the government taxes, spends or borrows. Congress holds the power of the purse. To go off of McCarthy’s analogy, families may have disputes about how much to spend on a credit card, but they still have to pay their bills. Lifting the debt ceiling simply allows the Treasury to pay the bills Congress has already agreed to.
The question, then, is not one of spending but of credibility: can Americans, and our allies around the world, trust the United States Treasury to keep its promises? For our entire 247-year history, Congress’ answer has been yes.
That stability is a big reason why the dollar has become the world’s reserve currency. The dollar’s supremacy is fundamental to our projection of power in every corner of the world. And it’s been a bipartisan imperative. While Democrats had fundamental disagreements with President Trump when he was in office, its members in Congress voted to raise the debt ceiling multiple times during his presidency — and without brinkmanship or quid-pro-quos. Congress should never jeopardize our nation’s credibility, or the dollar’s unique position among the world’s currencies.
Yet this is precisely what the Speaker and his allies are doing with their continued threats to default. One of the CCP’s goals as it seeks to replace the U.S. as the global economic leader is to erode the dollar’s reserve-currency status. Just last month, China and Brazil announced an agreement to trade directly in each other’s currencies, something which would have been hard to imagine just a decade ago. De-dollarization is in the air as discussions swirl of a new BRICS currency. Any efforts by the CCP to weaken the dollar would be a sideshow compared to the showstopper of a default and its fallout.
At a moment when President Xi is trying to convince the world that democracy is on the decline, and that the American system of government doesn’t work, a self-inflicted economic crisis would make his case for him. If we want to stand up to the CCP, and stand with our allies, we need to demonstrate that democracies, for all their messiness, can tackle serious challenges and improve people’s lives.
Worse yet, House Republicans’ demand to cut spending to FY22 levels would slash billions from the State Department and other diplomatic tools at a time when we should be surging our capabilities, especially across the Indo Pacific region.
In important ways, concern over many of the CCP’s recent actions is bipartisan in Washington. But McCarthy and House Republicans who cry out against China’s strengthening hand are failing to admit that America’s ability to navigate this strategic competition will in large part be determined by whether or not we can fix our democracy, invest in our own innovation and economy, and act responsibly so other nations trust us enough to join a strong global coalition.
Trust in the U.S. becomes shakier when hyperpartisanship careens us from crisis to crisis. Foreign officials calibrate that trust not off of our words but based on our actions. In other words, we need to get our act together.
Americans should judge Speaker McCarthy’s true commitment to addressing the challenges we face with China not by creation of the Select Committee, but instead by whether he is willing to do what’s right for our democracy and economy. That starts with ending his threat to sabotage our economy and our global power, and supporting a clean raise of the debt ceiling so the United States can pay its bills and maintain our stability and credibility. The world is watching.
Andy Kim represents New Jersey’s 3rd District and Jake Auchincloss represents Massachusetts’ 4th District. Both are members of the Select Committee on the CCP. Brendan Boyle represents the 2nd District of Pennsylvania and is ranking member on the House Committee on the Budget.