The Debt Ceiling: Republicans Get 90 Percent of What They Want

by Mark Gabrish Conlan • Copyright © 2023 by Mark Gabrish Conlan for Zenger’s Newsmagazine • All rights reserved

“Leverage is the key. When I have something you want, and you feel like you need to have it, then you can’t get it anywhere else.”
– U.S. Congressmember Andy Biggs (R-Arizona), https://apnews.com/article/zooey-zephyr-freedom-caucus-republicans-fc3de20bb1f4ea4deba6d33bd20cdf31

“I understand the different leverage points that you would have under Article II of the Constitution. I studied that a lot becoming Governor about Florida’s Constitution, and you’ve got to know how to use your leverage to advance what you’re trying to accomplish.”
– Governor and Presidential candidate Ron DeSantis (R-Florida), https://www.youtube.com/watch?v=VqTp1Ob46n0

“Leverage” is a big word among Republican politicians these days. The modern-day Republican Party is pushing an agenda far out of tune with what the majority of Americans actually want, including heavy-duty restrictions on abortion, virtually no restrictions on gun ownership, draconian measures against Queer Americans in general and Trans Americans in particular, keeping Donald Trump’s huge tax giveaways to the rich in place, and eviscerating what there is of a social safety net in this country. Rather than push these policies in normal political ways, Republicans are actively looking for loopholes in America’s nominal “democracy” so they can impose their will on people whether the people want what they have to offer or not.

The recent manufactured “crisis” over America’s debt ceiling, which ended May 31 and June 1 when both houses of Congress passed a so-called “compromise” that gave Republicans about 90 percent of what they wanted, is a case in point. The debt ceiling itself is a disgusting relic of a bygone era (it was originally instituted in 1917 over concerns that the U.S. would run up a budget deficit fighting World War I) that periodically requires the Congress and the President to have another vote on whether to pay back debt the government has already incurred, rung up and spent in the normal budget process. Its weaponization is a phenomenon of the modern-day Republican Party’s refusal to trust its priorities to the normal budget process (if there is such a thing anymore, since as some Republican Congressmembers pointed out it’s been decades since the U.S. actually passed a formal budget instead of funding the government through so-called “continuing resolutions”) and instead quite literally to hold the U.S. and world economies hostage to make demands they couldn’t get through under regular Congressional order.

The final phase of the negotiations over the U.S. debt ceiling started on April 26, when House Speaker Kevin McCarthy pushed through his caucus a bill he called the “Limit, Save, Grow Act” (https://www.politico.com/news/2023/04/27/white-house-regroups-mccarthy-debt-ceiling-success-00094273). As U.S. Senator Bernie Sanders (I-Vermont) said in a commentary in the British newspaper Guardian on why he voted against the final “compromise” (https://www.theguardian.com/commentisfree/2023/jun/02/bernie-sanders-debt-ceiling-bill), “The original debt ceiling legislation that Republicans passed in the House would have, over a 10-year period, decimated the already inadequate social safety net of our country and made savage cuts to programs that working families, the children, the sick, the elderly and the poor desperately needed.”

A more moderate member of the Senate Democratic Caucus, Bob Casey (D-Pennsylvania), told the Politico Web site after “Limit, Save, Grow” passed, “Most Americans want Republicans to take action to avoid default. They don’t want the price of that to be throwing a million people off Meals on Wheels.” Like President Joe Biden, Casey called on the House of Representatives to pass a “clean” debt ceiling bill instead of holding the full faith and credit of the American government hostage. “After that’s done, on a bill that should be about [the debt ceiling] and nothing else, you can have lots of discussions about appropriations level,” Casey said.

But throughout the process, McCarthy insisted that as House Speaker he would not allow the House to vote on a “clean” debt ceiling bill – and he had the power to make sure of it. House Democrats circulated a so-called “discharge petition” to force a vote on a “clean” bill, but in addition to the 213 House Democrats they would have needed at least five Republicans – and McCarthy’s hold on his own caucus was so strong that that was five more Republicans than the Democrats actually got.

Underestimated by Democrats because of the arduous process by which he got elected Speaker in the first place – it took 15 ballots over four days and McCarthy had to make substantial compromises with the farthest Right-wingers in his caucus to get the votes – McCarthy actually outplayed Biden at every turn. He made it clear that he wouldn’t allow the House to vote on a “clean” debt ceiling, and he did just that. McCarthy was able to keep the final negotiations on the so-called “compromise” just between himself and Biden. Biden had wanted House minority leader Hakeem Jeffries and Senate leaders Chuck Schumer and Mitch McConnell to be at the table, but McCarthy said no – it would be just McCarthy, Biden and people on their staffs – and he won.

What’s more, McCarthy was able to set the terms of the narrative on Republican-friendly domain. By being maddeningly vague as to just what Republicans wanted to cut to bring down total government spending, McCarthy was able to keep the debate focused on, “Does the federal government spend too much?” – an issue on which Republicans have a huge advantage in popular support – rather than on specific programs people actually want, need and favor, where Democrats tend to have the advantage. McCarthy protested throughout the process that Biden didn’t meet with him for 97 days after February 1, when the two had a preliminary confab at the White House, and after a while he sounded like a teenage girl whining that the Big Man on Campus wouldn’t ask her to the prom – but ultimately he got his prom date with Biden.

As for the final “compromise” bill, H.R. 3746 – known, in a typical piece of Orwellian Newspeak and “doublethink” from today’s Republicans, as the “Fiscal Responsibility Act” (when it was pushed through by some of the most blatant fiscal irresponsibilities of all time) – the best thing that can be said about it is it could have been a lot worse. As New Yorker columnist John Cassidy wrote on May 30 (https://www.newyorker.com/news/our-columnists/the-debt-ceiling-deal-could-be-a-lot-worse), “At the G.O.P. side’s insistence, the agreement will introduce work requirements for needy adults in their fifties who receive federal food assistance, and it will stiffen existing work requirements for needy families who receive cash assistance. Republicans claim that these provisions will save the country money, but the sums involved are relatively trivial in a 6.3-trillion-dollar budget, and the effect on the lives of some of the neediest Americans could be devastating. The deal also claws back some twenty billion dollars in funding that Congress had previously allotted to the Internal Revenue Service for a crackdown on tax evasion, particularly by the wealthy.”

But Cassidy added that the “compromise” at least avoids some of the truly horrendous provisions of “Limit, Save, Grow.” “House Republicans were also demanding work requirements for Medicaid, the federal health-care program for poor individuals and families, and the debt-ceiling bill that they passed in April would have rescinded all eighty billion dollars of additional I.R.S. funding from last year’s Inflation Reduction Act,” Cassidy wrote. “The White House fended off these demands, but the fact remains that it reached an agreement that targets spending programs for poor people but doesn’t ask anything of the rich – and, by the way, also exempts the vast Pentagon budget from any cuts. Evidently, the White House decided that, in order to secure a deal, it had to give McCarthy some red meat for his MAGA-heavy caucus. … In today’s G.O.P., making life harder for poor people is something to celebrate, whereas going after rich tax evaders is simply unacceptable.”

In addition, the final deal contains something blandly referred to as “permitting reform” that will spell the virtual death of any effective environmental regulation in the U.S. It vastly restricts the ability of the U.S. Environmental Protection Agency (EPA) and the federal courts to block various projects for mining coal, drilling oil and tapping other environmentally destructive sources of energy. The “Fiscal Responsibility Act” even contains a specific go-ahead for one particular project, the Mountain Valley Pipeline, which will cut through West Virginia and into Virginia. President Biden agreed to push this particular energy project in exchange for Senator Joe Manchin’s (D-West Virginia) vote last year for his so-called “Inflation Reduction Act,” the big bill passed over unanimous Republican opposition that embodied most of Biden’s domestic agenda, or at least the part of it he could get through a divided Congress hamstrung by divisions within his own party.

The pipeline is supported by both of West Virginia’s Senators, Manchin and Republican Shelly Moore Capito, but no one bothered to run it by Virginia Senator Tim Kaine, a Democrat who was Hillary Clinton’s running mate in 2016. Kaine complained not only that the pipeline was an environmental disaster, it would also dispossess thousands of farmers in Appalachian Virginia whose families have worked these lands for generations. And he questioned the precedent this sets that any well-heeled energy company can lobby Congress for a blanket exemption to all environmental reviews for a specific project and make a mockery of the EPA by doing so. Kaine said he would make a motion on the Senate floor to strip the blanket approval of Mountain Valley from the bill, but his amendment – like those of U.S. Senator Rand Paul (R-Kentucky) and others pushing a so-called “conservative alternative” to an already pretty Right-wing bill – ran afoul of the fast-track process Senate leaders Schumer and McConnell had agreed on to make sure the bill passed the Senate in identical form to the House version.

Progressive economist James K. Galbraith published a commentary on the deal on The Nation’s Web site May 30 that discussed what a sweeping triumph the deal was for Republicans (https://www.thenation.com/article/economy/debt-ceiling-deal/?utm_source=Sailthru&utm_medium=email&utm_campaign=Daily%205.30.2023&utm_term=daily): “It spares the military, veterans, Social Security, and Medicare, focusing cuts and caps on non-defense, discretionary spending – which, as the Center for American Progress has explained, includes many of the most ‘essential programs.’ Those cuts accumulate, and – as population grows and prices rise – they will be steep. True, the spending caps apply for only two years, but then the debt ceiling will come up again, and they will likely be renewed. The precedent has been set. Speaker McCarthy is right: the cuts are historic. The deal means austerity for the long term. It is a huge Republican win.”

We Didn’t Need to Be Here

The debate over the debt ceiling was replete with missed opportunities for the Democrats to avoid the confrontation altogether. As a May 24 New York Post editorial (https://nypost.com/2023/05/24/on-debt-ceiling-its-not-biden-vs-the-gop-but-biden-vs-the-voters/) stated, “Democrats could’ve moved to pass a no-strings ceiling-lifter last year, while they still controlled Congress: They knew the issue was coming.” Instead they chose to use their political capital to pass the so-called “Respect for Marriage Act” to protect the rights of married same-sex couples against potential attack by the U.S. Supreme Court. As one-half of a married same-sex couple, I’m grateful that they did that – but quite frankly I would rather they had either eliminated the debt ceiling altogether or did what the only other country in the world that does this to itself, Denmark, did and raised it so high it would never be reached. Instead President Biden stupidly rejected this and said it would be “irresponsible” to get rid of the debt limit altogether.

Another alternative might have been to cite the provision of the Fourteenth Amendment to the U.S. Constitution, passed in 1868 after the U.S. Civil War, effectively to declare the debt limit unconstitutional. The relevant clause reads, “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” The clause was put into the Constitution to prevent the Southern states, once they were readmitted to the Union, from refusing to allow payment of the war debt incurred by the Union in suppressing their rebellion.

But Biden’s chance to invoke the Fourteenth Amendment to pay America’s debts anyway despite the hostage-taking by House Republicans would have taken much longer-term planning than it got. It would almost certainly have been delayed, and probably reversed, by the Right-wing judges who, thanks to Donald Trump’s and Mitch McConnell’s success in packing the Federal judiciary in general and the U.S. Supreme Court in particular, hold the balance of power in determining American constitutional law. Besides, the person who would have had actually to pay America’s bills in case the debt ceiling hadn’t been raised and America had been in default, Treasury Secretary Janet Yellen, publicly questioned whether she’d have had the right to do that under the Fourteenth Amendment.

James K. Galbraith’s Nation column offered more alternatives a truly imaginative President could have used to defuse the debt ceiling crisis and take the House Republicans’ leverage away. “It could have issued the platinum coin,” he wrote. “The claim that the Supreme Court might have blocked it has been rebutted by Phillip Diehl, a former director of the Mint, who drafted the enabling legislation. He said as head of the Mint, ‘The fact that it can have a trillion-dollar denomination on it was absolutely part of the intent.’ Or Treasury could have issued perpetual bonds, called ‘consols,’ not covered by the ceiling because they have no principal to repay. It could (probably) have issued premium bonds. It could have asked the Federal Reserve to clear Treasury checks with a zero-interest, unsecured line of credit. It could, finally, have let some checks bounce, if it came to that, and relied on the big bankers, not to mention the outraged public, to whip Congress into line. There was no chance that a default ‘crisis’ would fail to resolve in a few hours, at most.”

The Democrats could have seized on other opportunities afforded them by Kevin McCarthy’s craven desire to become House Speaker, whatever the cost. A few moderate Democrats could have crossed over and voted for him in January 2023, sparing him the horrible deals he had to make with the likes of Marjorie Taylor Greene (R-Georgia), Matt Gaetz (R-Florida) and other far-Right Republicans to become Speaker. Instead the House Democrats remained resolutely united behind their own leader, Hakeem Jeffries, and every time they went on TV and boasted that their caucus was united, I yelled at the TV, “WRONG! WRONG! WRONG!” A Speaker McCarthy elected with bipartisan votes would also have not had to give in to the terrible “motion to vacate” rule by which only one House member can force a vote on whether he can remain Speaker – and it would just take a majority vote to remove him.

But this never happened because of the bizarre, stupid, hidebound “traditions” by which the House governs itself that give virtually absolute power to the majority party, whichever one it is. This nearly threatened to short-circuit the ultimate “compromise” even before it could get to the House floor when Democrats voted en masse against the so-called “rule” under which it would be considered, debated and voted on. With a number of Republican representatives also voting against the rule, it squeaked through only after 52 House Democrats changed their votes from “no” to “yes” to allow the rule to pass. The final vote in the House to pass the bill was 314 in favor, 117 opposed – but 164 of the “yes” votes were Democrats and only 149 were Republicans. In the Senate the vote was even more lopsided: 63 to 36 in all, with 46 Democrats and only 17 Republicans voting "yes" while 31 Republicans, four Democrats and Bernie Sanders (a nominal independent who caucuses with the Democrats) voting "no." So this bill full of Republican priorities relied on the votes of Democrats to pass!

The “Bipartisan” Traditionalist

President Biden said and did none of the things that could have short-circuited the debt ceiling crisis because he’s a profoundly unimaginative man, bound by the rules of decency and decorum as he learned them in his 36 years in the Senate (1973 to 2009) and his subsequent eight years as Barack Obama’s Vice-President. Early on in the Biden Presidency I wrote that there seemed to be two Joe Bidens, the progressive tribune anxious to use the full powers of his office to address the growing inequalities in wealth and income, safeguard the environment and in particular take on human-caused climate change; and the moderate anxious to get along with everybody and preserve his “bipartisan” image.

As long as Democrats controlled both houses of Congress – however barely and hamstrung as they were by the loathsome 60-vote threshold for the Senate to do almost anything – progressive Biden had at least a fighting chance against moderate Biden. Once the Republicans gained control of the House in the 2022 midterms and served notice that they were going to hold raising the debt ceiling hostage for a sweeping attack on Biden’s agenda, moderate Biden took over and negotiated a truly ghastly deal whose only saving grace was that, as John Cassidy said, it could have been even worse.

As New York Times White House correspondent Peter Baker said on the June 2 episode of the PBS series Washington Week (https://www.pbs.org/video/washington-week-full-episode-june-2-2023-z55tvb/), “I think what [the final deal] tells us is that President Biden, of course, has now been able to burnish his reputation for bipartisanship. This is important to him. It’s part of his identity, his political identity. It’s part of his case for re-election next year. I’m the adult in the room at a time of lots of fractious fighting among the parties. It doesn’t necessarily match the desires and priorities of his own party. A lot of his House Democrats would have preferred he’d be more of a fighter, less of a compromiser. But for him, you saw him tonight give that speech in which he made clear that his priority is being seen as somebody who rises above the partisanship in the nation’s interest.”

That’s just the problem with Biden, wrote James K. Galbraith: “The president did not want to fight. He did not want to defend any principle. He did not want to use the powers he had to protect and defend the American people. He did not want to stand with Democrats in Congress or his constituents in the Democratic Party. He wanted to be seen sitting, side by side, with the Republican Speaker of the House. He wanted to get the plaudits of the pundit class for ‘compromise’ and for reaching a ‘bipartisan’ deal. Well, the President has what he wants. The Speaker has what he wants. Let them defend the consequences.”

The speech Peter Baker was referring to was Biden’s conciliatory message from the Oval Office on June 2 in which he paid tribute to Speaker McCarthy and presented the deal as one fair to both sides. McCarthy had sung a quite different tune in his own speech just after the House passed the final bill May 31. McCarthy was full of truculence and insistence that the “Fiscal Responsibility Act” was just the first step. Republicans, he said, were quite proud of the fact that for the first time in decades, the federal government would spend less this year than it did the year before. And he and his colleagues in the House Republican leadership who were standing with him on the podium announced their determination to pursue further cutbacks in American government spending, no matter what the cost to people’s lives and livelihoods.

Among the specific issues McCarthy pledged to keep pursuing is ending the Biden administration’s attempts to boost Internal Revenue Service funding, further gutting the nation’s environmental laws, and more cutbacks in social services in general, including imposing work requirements for Medicaid recipients. If the same political alignment of today remains after the 2024 election – Biden wins a second term but the Republicans keep control of the House – you can bet there will be a repeat of this year’s economic brinksmanship as soon as the deal’s suspension of the debt ceiling expires in January 2025. Republicans have found that holding the U.S. and world economies hostage in exchange for dramatic cutbacks in social-service spending and sweeping policy changes in other areas works.

As Jonathan Chait wrote in New York magazine (https://nymag.com/intelligencer/2023/05/debt-ceiling-deal-who-won-biden-mccarthy-republicans-hostage-extortion.html), “What will happen the next time a Democratic president needs a Republican House to lift the debt ceiling? There is no reason the ransom demand will be small. … The next round of demands will likely cut deeper into anti-poverty programs that were spared this time. Or possibly, Republicans will creatively demand concessions on immigration, abortion, or any other social issue that has seized their imagination at the moment.”

If the Democrats once again gain control of both houses of Congress, one of their first and strongest priorities should be simply to abolish the debt ceiling so they can no longer be victimized by this sort of blackmail. Until then, Republicans’ success in humiliating Biden and forcing him to negotiate with them despite Biden’s initial refusal to do so (his ultimate course reminded me of the way Ronald Reagan used to insist, “We do not negotiate with terrorists,” while he and his administration were negotiating with terrorists) will wreak untold havoc on the U.S. – and the world – for generations to come. As Jonathan Chait wrote in the above-cited article, “When you are holding a gun to the head of the global economy, and both sides understand the president has no option but to pay off the hostage-takers, there’s no natural limit to the size of the ransom.”