This week, the federal government will once again reach the debt limit, or the amount of money it can legally borrow to pay its employees, contractors, and bills. Treasury Secretary Janet Yellen has said that she can keep the government running through June with “extraordinary measures,” but after that, Congress will need to vote to legally raise the debt limit in order to keep virtually all parts of the government running.
By any rational measure, this shouldn’t be a big deal. There’s little technical reason for the debt ceiling to exist at all — a view shared, among others, by Yellen herself. Despite support from even moderate figures like Yellen, Democrats refused to eliminate the debt ceiling when they controlled both houses of Congress. Instead, they handed Republicans a loaded gun.
With the debt ceiling, as with counting votes or certifying an election, the Right hopes to seize on this otherwise drab government function as a point of leverage to thrust unpopular ideas onto the country. A faction of the incoming House Republican majority all but forced Kevin McCarthy to commit to shutting down the government before they would support his run for Speaker of the House. To be fair, McCarthy hardly needed to be strong-armed: he already said last fall that he planned to play chicken with Democrats over a government shut down in order to force cuts to Social Security and other government programs.
In fact, as the Washington Post reported Friday, rather than try to figure out a way to avoid a needless debt crisis, House Republicans’ primary concern is finding a way to make the Treasury keep paying investors who hold government bonds when the government shuts down. Instead of avoiding needless harm to the economy, they just want to shield their real constituents from the worst of the fallout.
For such a plan to work, it would have to both pass the Senate and receive Joe Biden’s signature — both of which, for the moment, appear to be nonstarters. But Biden and the Democrat-led Senate also need the House to agree to raise the debt limit and pass a budget if they want the government to keep running.
What looks like a stalemate on paper unfortunately favors the Right. Republicans are only too happy for most of the government to close down, meaning they have far less to lose in sticking to a hard line in negotiations. That leaves Biden and Democrats with two unacceptable outcomes: a nonfunctioning government, or draconian cuts to the federal budget, including potentially to Social Security and Medicare.
The most likely course of events is after several weeks of needless pain, representatives of economic sectors that depend to a greater extent on steady credit and government regulation will put enough pressure on McCarthy to go back on his promises to the far-right members of his caucus. He’ll eventually force through a stopgap measure that gets Democrats to agree to inflict significant pain on the American people for no good reason (if not as much as Republicans want), and then the far right of the party will depose him as speaker. Some other equally masochistic empty suit will take his place, we’ll all forget about it for six months, nothing will change, and then it will be time for the country to take another stupid ride on the same merry-go-round, our pockets a little emptier for it.
Doesn’t it always seem to turn out that way somehow?