Why everyone lacks credibility on the debt ceiling
Time to cough up, America. Tomorrow is Tax Day and, fittingly, Congress returns this week with negotiations over the debt limit at the top of the agenda in Washington.
House Speaker Kevin McCarthy set out his stall this morning with a speech in Manhattan. With the summer deadline on the fiscal cliff fast approaching, McCarthy today vowed that “in the coming weeks, the House will vote on a bill to lift the debt ceiling into next year,” adding that the legislation would also “save taxpayers trillions of dollars, make us less dependent on China, and curb high inflation, all without touching Social Security or Medicare.”
Biden still insists that he will not tolerate anything other than a “clean” vote on the debt ceiling being raised. Insisting on a no-strings-attached green light to more government debt amounts to a refusal to negotiate.
In this debt ceiling standoff, both sides lack credibility. The two parties insist on win-win, trade-off-free rhetoric in which they claim the mantle of fiscal responsibility while spending big where it matters.
Throughout his presidency, Biden has made claims of fiscal hawkishness that aren’t worth taking seriously. From the outlandish idea that the mammoth Build Back Better bill would have cost the taxpayer nothing to the idea that, simply by being in charge when emergency Covid spending expired, Biden is a ruthless deficit-slasher, this administration’s approach to fiscal policy has always strained credulity.
And the more time that passes, the worse the White House’s approach looks. Last week, the Wall Street Journal reported that the Inflation Reduction Act is proving far more costly than was initially estimated thanks to higher than expected uptakes in electric vehicle tax credits. New analyses from Goldman Sachs and Brookings estimate that the tax credits could end up costing the taxpayer more than triple the initially estimated $271 billion price tag. Separately, while the Congressional Budget Office initially estimated that the IRA would reduce budget deficits by $54 billion over the next ten years, an updated CBO estimate predicts that the legislation will in fact increase budget deficits by $216 billion over the decade.
Meanwhile, McCarthy has yet to find a way to square his party’s stated commitment to ring-fence Social Security and Medicare, and its determination to bring runaway spending under control. In his outline of a plan unveiled in New York this morning, McCarthy vowed to reduce spending to last year’s levels and rein in Biden’s expensive policy commitments. A step in the right direction, perhaps. But not exactly radical, balancing-the-books stuff, even if the White House described the speech as a “vague, extreme MAGA wish list that will increase costs for hard-working families.” (For more on the internal dynamics of the Republicans’ approach to the debt ceiling, read Matthew Foldi’s contribution below.)
Just as both sides lack credibility on the question of government spending, they also have what they believe to be winning arguments in the debt-ceiling standoff. Even if the GOP isn’t able to agree on a way to balance the books, the party does at least appear to acknowledge the serious problem of runaway spending.
Biden, meanwhile, seems to feel comfortable sticking to the line that anything other than a “clean” raise of the debt ceiling risks default and financial chaos, and therefore constitutes a reckless gamble. Ultimately, though, neither side appears to be enjoying this debt standoff very much. And perhaps that is what might force a compromise.
On our radar
MITCH RETURNS Mitch McConnell returned to the Senate this week. In his first remarks since a fall sidelined him for more than a month, the Republican minority leader said: “Suffice to say this isn’t the first time being hard-headed served me very well.”
GOP DIGS IN ON FEINSTEIN The Democrats have a short-term solution to their Dianne Feinstein problem. Senate Majority Leader Chuck Schumer is set to temporarily replace Feinstein on the Judiciary Committee. There’s one problem, though. To do so would require the unanimous consent of all senators. But Republican Senator Tom Cotton has indicated that he will object to the move.
DESANTIS PAC GOES AFTER TRUMP Last week a Trump super PAC released an add attacking Ron DeSantis as “pudding fingers,” lambasting the Florida governor over a claim that he ate a chocolate pudding with his fingers on a private jet. Now a DeSantis super PAC called Never Back Down released two videos hitting back. One accuses Trump of siding with Democrats on gun control, the other rebutting Trump’s claims that DeSantis would cut Social Security. “Trump should fight Democrats, not lie about Governor DeSantis. What happened to Donald Trump?” asks the narrator.
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House GOP united on debt ceiling… for now
The battle over the debt ceiling is starting to come into focus, and an at times divided GOP seems to be on the same page…at the moment.
The plan announced by McCarthy today sounds an awful lot like what the Main Street Caucus, led by Dusty Johnson and Stephanie Bice, want to focus on. The duo’s priorities, which include time-tested GOP priorities like work requirements for welfare, energy independence, and deficit reduction, are in some way even similar to the lines drawn by the Freedom Caucus earlier this year.
The self-described pragmatic conservatives in the House are eager to note that they’re already playing a lead role in the negotiations. Representative Bice tells me that her caucus “look[s] forward to continuing to lead the way as the House considers must-pass pieces of legislation.”
When it comes to the big-picture details, House Republicans sound like they’re on the same page. As this plays out, those working on the negotiations think that the Freedom Caucus is likelier to draw a harder line in the sand than the Main Street Caucus, but for now, the official positions laid out by McCarthy, the Main Street Caucus, and the Freedom Caucus seems to be in alignment.
–Matthew Foldi
AMLO is not worthy of your praise
Why should the man presiding over the single greatest cause of death for people ages eighteen to forty-five in America be reframed as a hero for social traditionalism? We live in strange times. Sohrab Ahmari wrote in defense of Andrés Manuel López Obrador’s “irrepressible social conservatism” last week, views which he also promoted to Fox News audiences this weekend.
Ahmari described AMLO as a “man of the old left” who is “not a cultural progressive.” “In Latin America, there is this possibility of this combination of being relatively on the left on economic issues, but culturally conservative,” Ahmari said. “AMLO represents that.”
Sadly, this is an example of hopes outpacing reality and searching for a foreign model that largely doesn’t exist. The authoritarian form of progressive populism AMLO helms has done more to propagate leftist social ideology throughout Mexico than any recent head of state. Via a mandatory national curriculum, to which even private schools must conform, they’ve revamped the entire education system in service of this idea as part of AMLO’s “Fourth Transformation”. What’s inside would be right at home in a progressive American school district, including promotion of transgenderism and LGBT ideology, mandatory participation in “Pride” marches, ordering gender neutral language instruction, framing the teaching of history firmly in class struggle and, of course, Mexico’s own version of CRT, indigenismo. Keep reading…
– Ben Domenech
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Poll watch
PRESIDENT BIDEN JOB APPROVAL
Approve 37.7% | Disapprove 56.7% | Net Approval -19.0
WHO SHOULD RUN IN 2024?
Should Biden run in 2024? Yes: 35% No 61%
Should Trump run in 2024? Yes: 29% No: 64%
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