We’re less than a week from the June 1 deadline when the United States might not be able to meet its financial obligations.
The country has never defaulted on its debt, so it indeed would be a dark day in our nation’s history. The stock market is already reacting negatively to the mere possibility.
And it would be so silly if it were to happen.
Because let’s face it: What House Speaker Kevin McCarthy and his members have proposed as a compromise to raise the debt ceiling is incredibly fair. The freakout by the left to any concessions, regardless of how small, speaks to much more serious troubles ahead as the federal government faces unsustainable debt levels.
More:Biden needs to compromise on debt ceiling. Otherwise, we’re all headed toward disaster.
“The proposal that’s been put forth by Speaker McCarthy is a very modest proposal,” says Joel Griffith, economic policy research fellow at The Heritage Foundation.
Guess what? Biden’s negotiating.
After months of treating Republicans like hostage takers and swearing he wouldn’t “negotiate” with them, President Joe Biden is now doing just that. He has met with McCarthy several times this month, most recently on Monday, and both men seem confident they are close to a deal.
At this point, they appear to be ironing out the details.
The sticking points are around new work requirements for some welfare recipients (which Biden supported in the 1990s while a senator), where spending caps should be and for how long, and whether any new revenue is necessary. Those are important discussions to have, and they were once commonly tied to debt ceiling debates.
As McCarthy has said, the problem isn’t revenue – it’s spending. Numerous economists agree.
“We are spending too much,” Brian Wesbury, First Trust Portfolios chief economist, observed on Twitter. “And having a debt ceiling is important because it makes politicians face the fact that they spend too much. There needs to be a limit.”
That’s something both Republicans and Democrats have had a hard time with in recent years – and it’s a huge problem, judging by our nearly $32 trillion (and counting) debt.
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To make matters worse, McCarthy and Biden have to deal with the extremes in their respective parties, and the rhetoric from elected leaders on both far ends of the political spectrum hasn’t been helpful.
What’s motivating Biden?
Biden has correctly observed that defaulting would be disastrous. Other factors, however, are motivating the president’s sudden desire for deal-making.
That includes politics. A recent CNN poll found that 60% of Americans say Congress should raise the debt ceiling only if it’s tied to spending cuts.
And a poll from NPR/PBS NewsHour/Marist found blame would be almost evenly split between Republicans (45%) and Biden (43%) if the country defaults. Yet what should be most concerning to Biden is that independents said they’d blame the president by a 47%-to-38% margin.
Progressives are out to lunch
Biden has let the progressive wing of his party talk him into floating a wild idea – that he could unilaterally raise the debt limit through a “provision” in the 14th Amendment that Democrats seem to have invented out of thin air.
The 14th Amendment is best known for guaranteeing due process and equal protection under the law. Trying to say it allows the president to issue new debt without congressional signoff is flimsy at best.
It’s alarming to see how quickly progressives have lined up behind the idea, however.
Pennsylvania Sen. John Fetterman went as far as to posit on social media: “This is the whole reason why the 14th Amendment exists, and we need to be prepared to use it. We cannot let these reckless Republicans hold the economy hostage.”
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Biden has already proved he’s willing to work around Congress (and the Constitution) to bulldoze through his agenda. Just look at his COVID-era executive overreach and his $400 billion student loan giveaway – which the courts have halted.
In this case, I think McCarthy and Biden will be able to iron out a deal − the sky-is-falling rhetoric aside.
What we should all worry about is what comes next. Raising the debt limit does nothing to address long-term drivers of the nation’s debt, including Social Security and Medicare, which are marching toward insolvency.
As Griffith with Heritage says: “The really big concern here should be what’s going to happen in the future.”
Ingrid Jacques is a columnist at USA TODAY. Contact her at [email protected] or on Twitter: @Ingrid_Jacques