No one should be under the illusion the debt ceiling deal does anything except increase spending. Even if Congress follows the terms of the bill, spending will continue to grow every year and total debt will continue to increase with no viable prospect to achieve anything near a balanced budget.
Last week, the Great Debt Ceiling Debate of 2023 ended with a whimper rather than a bang, as these things often do. After almost five months of bloviating, posturing, debating, demagoguing, and everything else politicians do to the irritation of the masses, the House and Senate passed an obvious bipartisan compromise that does nothing to solve the underlying problem and sent it to President Joe Biden’s desk for signature. In that sense, there are no winners, only losers, starting most importantly with the taxpayer and the federal budget. The “compromise” locks in spending at unsustainable levels not seen since World War II, effectively keeping the elevated budget levels put in place to address the pandemic in perpetuity without a pandemic. To put this in perspective, the Federal Government spent approximately $4.4 trillion in 2019, but by 2022, that figure exploded to $6.27 trillion. Rather than rollback spending which is no longer necessary by any objective measure, Congress and the President agreed to keep the increases coming, albeit at a much slower rate than the President himself proposed in his budget blueprint earlier this year. Even worse, a media just as addicted to spending as the politicians in Washington didn’t make even the slightest attempt to explain why pandemic level expenditures are required without a pandemic, operating under the timeless assumption that government spending must always increase from a baseline instead of being properly budgeted based on needs. This is even worse when you consider that future Congresses are by no means bound by these agreements, and are free to spend whatever they want. A vote once made as a mostly symbolic gesture for fiscal sanity can be unmade by the same politician at their own whim and discretion. The history of the much-maligned Sequester, the most successful budget control initiative in the past 30 years or more, tell you all you need to know: Many of the same politicians that voted for it in both parties started immediately planning to repeal it, at least partially, leading to the fiscal disaster facing the country today.
Politically speaking, however, there are always winners and losers. Showdowns between the parties on high stakes issues alter the balance of power, and from this perspective, the big winner is clearly Republican Speaker of the House Kevin McCarthy. The media, as usual, did its best to hide the reality, but President Biden entered the year refusing to negotiate on the debt ceiling at all, challenging Republicans to put their plan in writing. For months, we were told Republicans were “hostage takers” and “terrorists,” willing to plunge the country into an unprecedented economic tailspin for their own misguided political goals. A smattering of recent headlines described Republicans as “extremist troops,” “girding for ‘war’,” with conservatives conducting a “rebellion” to quote CNN, The New York Times, and Axios. Democrats meanwhile were building a “consensus,” finding a “reasonable middle” and “quietly paving the way for a deal.” This was true even though well over half of the debt ceiling bills over the past two decades have resulted in compromises around spending, and yet the President continued to insist such a thing was simply not done and he would not negotiate under any circumstances. The full faith and credit of the US was at risk and therefore, only a blank check will do.
Underlying these tirades was the notion that Speaker McCarthy could not unify the slim Republican majority in the House to pass a bill representing the conservative position. At the time, this was not an unreasonable position to take with the GOP holding a meager five vote majority and a Freedom Caucus that represents conservative positions largely unwilling to support anything short of major cuts. Somehow, however, Speaker McCarthy succeeded in late April, passing legislation that increased the debt ceiling for a year and set caps on discretionary spending in addition to work requirements and a cancellation of the President’s student loan forgiveness executive fiat by a slim 217-215 vote. “He either has to negotiate now or we’re the only ones that have raised the debt limit,” he said after achieving success. The Republican backed bill had no chance of becoming law – either getting through the narrow Democrat majority in the Senate or getting President Biden to sign it – but it totally changed the dynamics of the debate. Suddenly, there was a concrete proposal representing the Republican position and the President was forced to the negotiating table. Republican hopes to reach a compromise that trimmed spending at least slightly were buttressed by polling data, also studiously avoided by the media, that suggested the public at large was in favor of a bill that increased the debt ceiling in exchange for spending cuts. Reuters/Ipsos found a slight majority of 51% in favor of cuts while Harvard CAPS Harris put the number at 65% compared to only 35% that wanted a clean bill. The Trafalgar group found almost 60% wanted either no increase at all or an increase with cuts.
Biden being Biden, however, it took him and his staff some time to realize reality had shifted under their feet, as what Teddy Roosevelt called the great kaleidoscope of politics suddenly changed colors and the balance of power tilted. For several weeks, the President and especially Press Secretary Karine Jean-Pierre played endless word games over what negotiating really means. Were they negotiating over the debt ceiling as Biden said they never would? Of course, not. Instead, they were negotiating over the budget or something, as though they remained in denial about the Republican bill. Senate Majority Leader Chuck Schumer put it this way, negotiations on the budget and raising the debt ceiling are “separate but simultaneous.” Whatever that means, it was a marked difference from February when he claimed “we’re going to win this fight, and it’s going to be a clean debt ceiling.” As Politico described it, “six months later, Democrats are stuck doing exactly what they said they wouldn’t — negotiating on the debt ceiling with Republicans.” To be sure, they also attempted to frame Biden himself as a master negotiator and compromiser – after he’d refused to negotiate for months. Regardless, a compromise was almost magically reached while the average American was celebrating Memorial Day at a backyard BBQ. The compromise didn’t thrill conservatives by any means and ultimately went on to be supported by more Democrats than Republicans, but much of the original bill passed by the House remained as framework. The budget was set at last fiscal year’s admittedly bloated figure with no more than 1% increase each of the next two years. The President’s student loan forgiveness program remained intact to await its fate at the hands of the Supreme Court, but the bill mandated that payments that have been paused for more than three years resume in August in another small win for conservative governance. The work requirements were not as stringent as desired, but there were some requirements in exchange for some shifting of funding to please Democrats.
At the risk of alienating my conservative readers, the President himself deserves some credit. It took him a while, but he ultimately recognized the political reality and was able to get a deal done in time to avoid default. President Biden also resisted pressure from the progressive movement to bypass the debt ceiling altogether with suspect schemes such as the Fourteenth Amendment and minting a trillion coin. This is no small thing in an era where executive power is continually expanding to include anything and everything the President wants. Alas, no one should be under the illusion the debt ceiling deal does anything except increase spending. Even if Congress follows the terms of the bill, which is a huge if given the history, spending will continue to grow every year and total debt will continue to increase with no viable prospect to achieve anything near a balanced budget. This should concern every American even if very few politicians seem to share care and both parties are most certainly to blame.
Confessions of a Conservative Atheist 