The White House announced late Saturday night that it has reached a deal with Kevin McCarthy and his deputies in the United States House of Representatives to avert a fiscal crisis that Republicans have been enthusiastically prepared to manufacture by refusing to provide the votes needed to raise the debt ceiling.
The debt ceiling, as readers likely know, is a mechanism needed to reauthorize already authorized spending if that spending would exceed a predefined statutory limitation. It is an antiquated and unnecessary fiscal lever that serves no useful purpose for the country. But Republicans love it, because when a Democrat is in the White House and they control a chamber of Congress, they can use it to extort destructive cuts to the nation’s essential public services.
Republicans made it clear even before the last Congress finished its work that they would be prepared to take all of us as hostages again should they get the opportunity, in order to force their Norquistian agenda on the country and make Democrats own its implementation. Democrats could have taken away their leverage by scrapping the debt ceiling altogether before losing their House majority, but they didn’t, which was a huge mistake.
The Biden team in the White House initially responded to Republicans’ ransom demands by calling for a clean debt ceiling bill to be passed and refusing to begin the process of capitulation. More recently, however, the White House has been “negotiating” to reach a “deal” with McCarthy that might or might not be able to pass the House of Representatives. The White House has not released the specifics of the deal yet, but of course they’re leaking out anyway.
The New York Times characterized the specifics as follows:
The deal would suspend the borrowing limit, which is currently $31.4 trillion, for two years — enough to get past the next presidential election.
According to a person familiar with the agreement, it also would impose new work requirements for some recipients of government aid, including food stamps and the Temporary Assistance for Needy Families program. It would place new limits on how long certain recipients of food stamps — people under the age of 54, who do not have children — could benefit from the program. But it also would expand food stamp access for veterans and the homeless, said the person, who spoke on condition of anonymity because they were not authorized to discuss details of the package.
The tentative deal also claws back some unspent money from a previous pandemic relief bill, and reduces by $10 billion — to $70 billion from $80 billion — new enforcement funding for the I.R.S. to crack down on tax cheats. It includes measures meant to speed environmental reviews of certain energy projects and a provision meant to force the president to find budget savings to offset the costs of a unilateral action, like forgiving student loans — though administration officials could circumvent that requirement.
It also includes an enforcement measure that is meant to avert a government shutdown later this year.
It could have turned out much worse, but the new “work requirements” sounds just awful. Negotiating with hostage takers never yields good outcomes.
A better strategy for averting default would be to invoke the Fourteenth Amendment or mint a trillion dollar coin, rather than going back to embracing bad austerity policies like President Barack Obama unwisely did in 2011.
We don’t see McCarthy getting this “deal” through the House with only Republican votes or even mostly Republican votes. McCarthy will have to fracture his caucus and depend on Democrats to deliver most of the votes, or this whole thing will simply collapse and the math in the Senate won’t matter. The Fascist Caucus is already saying nope, and more Republican members may follow suit.
“I am hearing the ‘deal’ is for a $4 trillion increase in the debt limit. If that is true, I don’t need to hear anything else. No one claiming to be a conservative could justify a yes vote,” tweeted rabid right wing Congressman Bob Good.
If the House Progressive Caucus (chaired by our own Pramila Jayapal) concludes that the deal is not worth supporting, it will be in serious jeopardy pretty quickly.
Here’s what the White House had to say about the “deal” — this statement is attributed to President Biden himself rather than his Press Secretary:
Earlier this evening, Speaker McCarthy and I reached a budget agreement in principle. It is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone.
And, the agreement protects my and Congressional Democrats’ key priorities and legislative accomplishments.
The agreement represents a compromise, which means not everyone gets what they want. That’s the responsibility of governing.
And, this agreement is good news for the American people, because it prevents what could have been a catastrophic default and would have led to an economic recession, retirement accounts devastated, and millions of jobs lost.
Over the next day, our negotiating teams will finalize legislative text and the agreement will go to the United States House and Senate. I strongly urge both chambers to pass the agreement right away.
Legislative text is supposed to become available tomorrow. When it does, we’ll start going through it and scrutinizing the many provisions.
McCarthy’s current plan is to put the “agreement” up for a vote on Wednesday.