The Good, Bad, & the Ugly of the Debt Ceiling Deal
We avoided driving off the cliff--again. Aside from not experiencing a crippling depression, will the majority of the American people even notice?
As many prognosticated, the republicans’ reckless game of chicken over the debt ceiling failed.
President Biden didn’t even have to invoke the 14th Amendment, which unambiguously states:
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.
Naturally, as with every negotiation, there were some compromises, some good, others not.
Some media outlets are hailing “the Fiscal Responsibility Act of 2023” a rousing success for Biden and the Democrats.
Others, though, are zeroing on members of the Democratic caucus feeling like they just handed republicans the keys to White House in 2024.
The deal allows both sides to claim a victory of sorts. Biden called it a “compromise” while Republican House speaker Kevin McCarthy described it as “worthy of the American people.”
The good.
The bill agrees to a two-year debt ceiling increase of $31.4 trillion, eliminating the need to repeat this whole unnecessary charade before the presidential election.
Republicans get a federal spending curb, but not the magnitude they wanted. Specifically, it leaves non-defense spending flat for the 2024 fiscal year, but increases military spending three percent, and limits the raise in 2025 to one percent. The White House gets what it wants in increasing military and veteran spending to keep up with inflation.
Congress will re-claim billions in unspent COVID relief funds.
Social Security, Medicare, and the president’s student-debt relief program remain intact, as do the climate and clean energy provisions included in last year’s Inflation Reduction Act (IRA).
President Biden announced:
This is a deal that’s good news, I believe you’ll see, for the American people. The agreement prevents the worst possible crisis: a default for the first time in our nation’s history — an economic recession, retirement accounts devastated, millions of jobs lost. It also protects key priorities and accomplishments and values that congressional Democrats and I have fought long for, long and hard for.
Now the bad.
Considering republicans demanded the law’s clean energy tax credits and subsidies be withdrawn, the fact they aren’t going to be is a victory, albeit a pyrrhic one.
While negotiations leave the IRA’s climate and clean energy provisions in place, W. Va. “Democratic” Sen. Joe Manchin got in his contribution for a multi-billion-dollar natural gas pipeline he has been trying for a year to get passed after a federal court rejected a permit to allow the project to traverse a national forest.
The Mountain Valley Pipeline is projected to cut a 303-mile swath through Manchin’s fossil fuel-soaked state.
Environmental group Food & Water Watch condemned the addition, citing its blight on President Biden’s promised commitments to the environment and clean energy.
Virginia Democratic Senator Tim Kaine vowed to introduce an amendment to strip the Mountain Valley Pipeline from the legislation.
Finally, the ugly.
While Medicaid remains untouched, food assistance does not. Childless adults needing access to the Supplemental Nutrition Assistance Program (SNAP) will be required to work until age 54, up from age 49.
New work requirements will also be imposed on those requiring Temporary Assistance for Needy Families (TANF).
Washington state Rep. and Progressive Caucus Chair Pramila Jayapal tweeted:
https://twitter.com/RepJayapal/status/1662829555399139328
Noting SNAP recipients receive an average $6 per day in benefits, Rep. Jayapal explained:
I told the president that directly when he called me last week on Wednesday that this is saying to poor people and people who are in need that we don’t trust them. I think it is really unfortunate that the president opened the door to this.
https://twitter.com/PoliticusSarah/status/1662821674578837508
Groundwork Collaborative executive director Lindsay Owens condemned the provision, claiming “this is a punishing deal made worse only by the fact that there was no reason for President Biden to negotiate with Speaker McCarthy over whether or not the United States government should pay its bills.”
She explained:
After inflation eats its share, flat funding will result in fewer households accessing rental assistance, fewer kids in Head Start, and fewer services for seniors. The deal represents the worst of conservative budget ideology; it cuts investments in workers and families, adds onerous and wasteful new hurdles for families in need of support, and protects the wealthiest Americans and biggest corporations from paying their fair share in taxes.
In what some are regarding “a gift to rich tax cheats,” the bill dials back recently approved IRS funding, feeding into the republican lie that the IRA provides for “hiring another 87,000 armed IRS agents just to make sure you obey.”
https://twitter.com/igorvolsky/status/1662633907970342915
We’ve all heard the cliche, “Every cloud has a silver lining.”
Back in January, when Speaker McCarthy couldn’t get the votes for House Speaker, one of the Faustian bargains he made was to reinstate one member’s ability introduce a “no-confidence” vote to replace the speaker at any point.
An extra-legislative silver lining in all this debt ceiling sturm and drang is the collective outrage among House republicans threatening to boot McCarthy.