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Opinion The GOP is wrongly trying to blame Democrats for a debt ceiling blowup

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HR King
May 29, 2001
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By Catherine Rampell
Columnist |
January 10, 2023 at 7:00 a.m. EST



Imagine if Republican lawmakers threatened to blow up the Washington Monument unless Democrats agreed to cut Social Security. It would be understandable if President Biden and his party refused to haggle on such abhorrent terms, and said they wouldn’t negotiate with terrorists.

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Pretty much the same form of extortion is happening right now, only the bomb is aimed at a different target: the global economy. And Republicans are already trying to blame Democrats for any carnage that might result.

Don’t let them.
For months, Republicans have openly threatened to take the debt limit hostage unless they get spending cuts and other pet projects. Then, last week, as one of his concessions to the Chaos Caucus that had opposed him as speaker, Kevin McCarthy (R-Calif.) reportedly agreed that the House would raise the debt limit only if the measure came bundled with cuts to future spending, including “mandatory” programs such as Social Security and Medicare.



To be clear: Refusing to raise the debt limit, or even coming close to default, would be catastrophic.
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To understand why, you need to know what the debt limit does and doesn’t do. It doesn’t authorize any new spending. But it does enable the federal government to pay off existing obligations that past Congresses had committed to through their previous tax and spending decisions.
The consequences of reneging on past bills could be dire. First, refusing to pay off these IOUs would violate the Constitution, which says the “validity of the public debt … shall not be questioned.” It would threaten the government’s ability deliver on core functions, including paying military salaries. (Support our troops, Republicans say, except maybe when doing so interferes with a political stunt.)

Worst of all, not raising the debt limit — that is, defaulting on our debt, for the first time in U.S. history — might cause a global financial crisis.


Until now, U.S. debt has been considered virtually risk-free. The riskiness of all other assets around the world is benchmarked against the relative safety of U.S. Treasury securities. If the U.S. government reveals itself to be an unreliable borrower, however, expect to see shockwaves course through every other financial market, as many question how safe (or not) those other investments might be.
This is the last thing the economy needs amid fears of a global recession.
Democrats have said the terms McCarthy reportedly agreed to are a nonstarter: They want a clean debt-limit increase, period. This stance seems reasonable to me. Anything related to future budgets should be negotiated in the context of those budgets and not under threat of unrelated default on past bills. The country’s creditworthiness should be considered an innocent party here, just as a beloved national monument would be.



For their part, Republicans are exploiting public confusion about the debt ceiling. On this week’s Sunday shows, Republicans implied that threatening to default on our debt obligations was somehow the fiscally responsible course of action. This is categorically false.
If anything, their brinkmanship could raise U.S. borrowing costs going forward — increasing deficits — because our government will be judged a riskier borrower than had previously been assumed.
In any event, if Republicans genuinely cared about practicing fiscal responsibility, they had ample opportunity to demonstrate as much when they had unified control of government during Donald Trump’s presidency. Instead, they passed an unfunded tax cut that added nearly $2 trillion to the deficit. Under Trump’s leadership, Congress massively increased spending, too. By January 2020 — that is, before covid-19 hit — Trump had already signed into law nearly $3 trillion in new spending, according to the Committee for a Responsible Federal Budget.






No matter. In recent days, Republicans have declared that Democrats are the true fiscal profligates. Never mind, apparently, that Democrats recently passed a bill, with zero Republican votes, that reduced deficits by $238 billion — or that Republicans are actively working to undo key parts of that law’s deficit-reducing mechanisms.
Republicans also recently suggested that if the financial system blew up thanks to their own debt-ceiling hostage-taking, that would be Democrats’ fault, too.
“I don’t know why President Biden says he’s not going to negotiate,” Rep. Scott Perry (R-Pa.), chairman of the House Freedom Caucus, said on ABC’s “This Week.”

Former New Jersey governor Chris Christie, a past and presumably future Republican presidential candidate, echoed this argument. “President Biden, to say he’s not going to negotiate, defies the reality of his situation,” Christie said, adding that “if we have a fiscal disaster because of some of these things, it’s going to be us judging who’s been willing to negotiate and who hasn’t.”


Now, should Democrats have dealt with the debt limit while they still controlled both chambers of Congress? Yes. Absolutely. If we breach the debt ceiling in the coming months, their failure to do so could turn out to be the biggest tactical blunder of the Biden era.
Even if Democrats erred in not neutralizing this bomb when they had the chance, though, blame for any subsequent carnage should be on the maniacs lighting the fuse.

 
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