Biden needs to demonstrate good faith on the debt ceiling
Hugo Gurdon
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Let’s start by stipulating that U.S. debt default would be a disaster.
It would tank the economy, crush stock prices, and wipe out trillions of dollars of retirement savings; it would jack up interest rates so mortgages, credit card debt, and all borrowing would cost much more; it would kill hundreds of thousands of businesses and put millions of people out of work; and it would hand China a gift in its long-standing campaign to oust the dollar as the world’s reserve currency.
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That is just the macro stuff. At the micro level, it would also inflict difficulty and suffering on individual lives, stanching government transfer payments to more than 20 million people via Social Security checks, welfare outlays, food stamps, and the like. This nation showed in the summer of 2020 that it has a propensity toward mass street violence, and it would descend into chaos once again.
Let’s further stipulate that there are some Republicans who don’t take these risks seriously enough, believing they are being conned by President Joe Biden, his Democratic colleagues, GOP economists, and even many conservatives who want to scare the House majority into raising the debt ceiling without linking it to spending cuts.
That is the sticking point. Excessive spending, $5 trillion in Biden’s first two years in charge, is what has pushed America to the brink of default, and Republicans can be forgiven for asking why the two matters (spending and debt) should not be discussed together since they are part of the same problem.
It is a good question. If Biden and the Democrats recognize that it would be a calamity for the United States to abrogate its financial obligations, why are they refusing to take the one obvious and available course to avert that imminent danger? They reject any and all negotiation. They arrogantly tout their overarching seriousness in contrast to their opponents, they present the danger of default as second to none, yet they treat it as less important than winning a short-term political victory and forcing GOP capitulation.
Democratic language is extreme. Biden accuses Republicans of taking “hostages” and describes the House-passed spending and debt ceiling bill, a piece of serious legislation passed by the majority of people’s congressional representatives, as a “ransom note that Speaker McCarthy unveiled in front of a crowd of Wall Street bankers.”
Even before Biden held perfunctory talks with Speaker Kevin McCarthy (R-CA) at the White House on Tuesday and scheduled more for Friday, he arranged speeches in New York to campaign against the Republican request for substantive talks and demands that Congress raise the $31.4 trillion debt ceiling without conditions.
This does not smack of a president and Democratic Party treating what they say is a devastatingly serious problem seriously. How can it be both a cataclysm and something on which to score cheap points? McCarthy acknowledges that his bill will require changes to pass, so he is signaling his readiness to compromise. It is Biden who refuses to give any ground, declining to acknowledge that the federal government is no longer a one-party monopoly.
Biden says if Republicans hike the debt ceiling without any strings attached, he will negotiate on spending cuts in the budget process. If that promise is more than a hollow shell game, the president is implying that he is willing to cut some spending. If that is so, why not do so now when the nation’s fiscal credibility is hanging by a thread?
Biden refuses utterly to offer anything but dubious promises. He balks at demonstrating good faith. He could do so by accepting a few spending cuts. A good start would be to return $80 billion in unspent COVID emergency money to the Treasury now that he is finally declaring the emergency over as of midnight May 11. If he won’t do even that, why should anyone believe he will make a serious effort later to rein in spending, which is the cause of our current perilous discomfort?
Demonstrations of good faith seem not to be in this president’s DNA. He won the Democratic nomination and the presidential election in 2020 as a centrist alternative to the banshees of the Democratic Left. But he has governed as though he’s never seen a radical policy he didn’t love. Time and again, he has gone along with the most extreme items on the militant agenda.
He fooled the nation on his third attempt to win the presidency. On the debt ceiling, as on much else, he is full of sound and fury, signifying nothing. Why would anyone believe him when he says he’ll negotiate seriously later as long as he’s given everything he demands now?