With about a week left before the U.S. government will reach its limit to borrow more money and add to the $31.8 trillion national debt, negotiations between congressional Republicans and President Biden seem to be at a standstill.
On one side, congressional Republicans, led by Speaker of the House Kevin McCarthy (R-Calif.), have passed a bill that aims to put our nation’s fiscal house back in order.
In short, the Limit, Save, Grow Act of 2023 would raise the debt ceiling by $1.5 trillion, reduce discretionary spending in 2024 back to 2022 levels with a limit of 1 percent growth over the next decade, repeal green energy subsidies for the wealthy, axe Biden’s student loan debt forgiveness program, reinstitute work requirements for welfare, claw back $30 billion in still-unspent COVID-19 funds, repeal the massive expansion in IRS funding under the so-called Inflation Reduction Act, and reinsert congressional authority over major rules and regulations.
This would save the country an estimated $4.8 trillion over the next decade. It would also more than likely produce strong economic growth and reduce inflation. It would lead to higher living standards for all Americans, especially those at the bottom rung of the income ladder, who are paying a hefty toll for the massive price hikes Biden’s profligate spending has unleashed.
On the other side stand the Democrats, led by President Biden. To date, the stated position of the Democratic Party when it comes to the debt ceiling negotiation is simple: Give us a “clean” debt ceiling increase — which means that the debt ceiling would be raised by at least $1.5 trillion with no strings attached.
Obviously, the Democratic-backed position is a non-starter for Republicans because they would lose all leverage over future spending cuts if they were to succumb to Democrats’ demands.
Hence, the two sides are at an impasse. However, given the role of the mainstream media and Biden’s political appointees, I fear the public is not getting the whole story.
Across the legacy media over the past few weeks, I have seen countless instances of blatant fearmongering and demagoguery when it comes to coverage of the debt ceiling situation.
Consider these headlines:
Fortune: The ‘dysfunctional’ debt ceiling fight could deal a $12 trillion blow to the American economy if Washington doesn’t get its act together
NPR: The fight over the debt ceiling could sink the economy
NBC News: White House details ‘severe damage’ to the economy if debt ceiling crisis occurs
And then there has been an assortment of statements like this from several high-ranking Biden administration officials.
Treasury Secretary Janet Yellen: “If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.”
Basically, the White House seems to be trying to frighten the general public into demanding the no-strings-attached borrowing that Democrats want.
So far, the Republican caucus in the House seems to be standing firmly behind McCarthy’s line in the sand — no debt ceiling increase without full-bodied spending cuts, work requirements for able bodied adults on welfare, and a few other commonsense positions.
What to watch for is this: How beholden is President Biden to the leftwing fringe of the Democratic Party?
As of this writing, several prominent far-left Democrats, such as Rep. Alexandria Ocasio-Cortez (D-N.Y.), have made it clear that they will hold Biden accountable should he compromise with House Republicans.
According to Ocasio-Cortez, Biden should “expect pushback on nearly any significant concession. This is not an appropriate vehicle … I don’t think we should normalize such destructive tactics.”
For the past few weeks, Biden has been waffling between negotiating with the GOP and playing hardball with his congressional counterparts. By throwing fits, the Squad is trying — and perhaps succeeding — in nudging Biden toward a “my way or the highway” negotiation tactic.
Interestingly, in 2011, then-Vice President Biden served as chief negotiator on behalf of President Obama during the budget impasse with then-Speaker of the House John Boehner (R-Ohio). Back then, Biden said: “By taking an absolute position: my way or no way. That’s not governing. That’s no way to govern. You can’t govern that way.”
Biden was absolutely correct in 2011. An essential aspect of governing is finding common ground and compromising so that both sides are content with the deal. However, that is not how Biden has governed during his two and a half years in the Oval Office.
If Biden were wise, he would look back at history. In 1995, then-President Clinton was languishing when he decided to buck many in the Democratic Party in negotiating a budget with then-Speaker of the House Newt Gingrich (R-Ga.).
Eventually, Clinton signed welfare reform, cut some taxes, reduced some regulations and declared in his 1996 State of the Union address that, “The era of big government is over.”
But the best part of the story is that by disavowing his big government, big spending ways and instituting commonsense fiscal reforms, Clinton ushered in one of the most prosperous periods in recent U.S. history. And by 2000 the U.S. government had balanced its budget and actually produced a surplus.
That was the last time the U.S. government ran a budget surplus. Since 2001, the U.S. government has run annual deficits, which now routinely eclipse $1 trillion.
Hence, we find ourselves in the untenable present-day situation of a $31.8 trillion national debt and $1 trillion deficits as far as the eye can see. Oh, and Social Security and Medicaid are on the verge of insolvency.
We are in a dire position. We need real leadership. We need our elected leaders to put our country’s future ahead of their next campaign for office.
Chris Talgo (ctalgo@heartland.org) is editorial director at The Heartland Institute.