Let the brinkmanship begin. On Wednesday, House Speaker Kevin McCarthy narrowly engineered a House vote to approve a $1.5 trillion spending package that would avert a breach of the debt ceiling—an outmoded, century-old spending threshold that saddles no other major economy but still possesses the power to trigger a potential default to US creditors, which in turn could produce a full-scale economic meltdown.
In the celebrity death match known as the GOP-led House of Representatives, the approach of economic calamity is music to the leadership’s ears. McCarthy and his caucus have used the threat of a downturn at the outset of a presidential election cycle as a tesseract-style portal to an alternate political reality, proposing to slash away at a host of federal programs, from key green-economy provisions of the Inflation Reduction Act to Biden’s student-loan forgiveness plan to the reversal of the planned expansion of IRS enforcement. The bill is a legislative absurdity, since it won’t pass the Democratic-led Senate, or win support from a Biden White House already digging in against the Grand Guignol of cuts Republicans are demanding.
More than that, though, it’s also a policy absurdity, since the GOP-led House in the Trump years blithely blew by debt-ceiling strictures in its drive to deliver tax cuts to the wealthy and expansive pandemic support measures. So the Republican pose of grown-up fiscal discipline—always a ploy to appease its antigovernment donor base—is now uniquely exposed as crass opportunism and glorified news-cycle theatrics. “The House legislation is all for show,” says economist Bruce Bartlett, a former Reagan Treasury official. “Why Republicans feel the need to pretend to absolutely decimate domestic spending is a mystery. The reason it is not serious is because the cuts are almost all in appropriated funds that Congress must fund annually. If they want to slash appropriations, all they have to do is cut them when they come up later in the year. Lumping them all together guarantees that nothing will actually happen.”
The absurdities continue to billow on, however, thanks to our political press’s bottomless appetite for content-free accounts of legislative posturing. CNN hails the debt-ceiling vote as a “win for Kevin McCarhy” while Politico’s reliably obtuse Playbook tip sheet coos that the House speaker has “proved his naysayers wrong” with the spending deal. This is all a way of saying, “We can’t be bothered to treat the functioning of the American political economy as anything but a question of marginal impression management.”
A more responsible account of the debt-ceiling fiasco in the making would start with a basic primer in constitutional governance—namely, a review of the 14th Amendment’s public-debt clause, which straightforwardly asserts that “the validity of the public debt of the United States…shall not be questioned.” There’s a robust body of legal scholarship and commentary showing that this dictum supersedes the already pointless economic playacting that now routinely attends the approach of a debt-ceiling default.
A better political press might then proceed to specific cases—building up as a prominent theme in its coverage the GOP leadership’s persistent throttling of the spending process to extort unpopular cuts to social spending that wouldn’t survive more sustained public scrutiny. One such item is an accelerated plan to institute work requirements for Medicaid recipients—an unsightly voyage back to the era of the Dickensian workhouse mostly designed to win the support of Freedom Caucus bomb-thrower Matt Gaetz (R-Fla.), who voted against the McCarthy package anyway.
Or take the plan to terminate student-loan forgiveness, which is another feckless bid to punish indebted Americans in order to finance Congress’s own flight from economic accountability. “Congress created the student loan system and relied on purported revenue from expanding it to ‘offset’ regressive tax cuts,” says University of Utah economist Marshall Steinbaum. “If Congress is dissatisfied now that those revenue forecasts turned out to be nonsense because they falsely assumed that more student debt would cause earnings to increase, then Congress has only itself to blame. And the student debt isn’t going to be paid back, no matter what kind of temper tantrum Congress throws.”
Responsible political reporters could note further that the specter of a US default driven by the purely symbolic debt-ceiling threshold is the very definition of an unforced error. The US jobs economy remains stubbornly hale, defying the ghoulish austerian prescriptions for contraction floated by Fed Chair Jerome Powell and his investor class abettors like failed Harvard president Larry Summers. And remaining Covid income supports are another target of the House debt-ceiling bill—which, alongside the bid to unloose donor-class plutocrats from an adequately staffed IRS, is a further indictment of the congressional spending battle as top-down class warfare by other means.
None of this crucial background to the debt ceiling will be on offer in the weeks ahead, however, as pundits and reporters will continue thronging to the storyline of who may negotiate away which critical government outlay for the sake of short-term political gain. The whole sorry spectacle is yet another reason to retire the unconstitutional and outmoded mechanism of the debt ceiling once and for all—but it’s unclear whether the Biden administration has the political will to break such a lovingly curated Beltway taboo. House Republicans “are children playing with matches,” Bartlett says. “And the fecklessness of the Biden administration is also a problem. It is obvious to anyone who looks at the issue seriously that the debt limit is unconstitutional and inoperable. Treasury can and should just ignore it.”