As President Biden and Speaker McCarthy wrap up a meaningless, unproductive meeting about the debt ceiling, the Patriotic Millionaires would like to offer our perspective on the absurdity masquerading as serious discussion among lawmakers and members of the media.
Biden and the Democrats can’t rely on Republicans to come to their senses and do the right thing anymore. If Republicans are willing to let the debt limit situation escalate this far – not to mention literally use the entire global economy as bait – they aren’t going to change ways, no matter how bad things get. Biden and the Democrats need a new strategy, one that does not involve negotiating with economic terrorists.
There is no room for negotiation here. Neither of the two options presented by Republicans – allow the US to default or agree to draconian cuts to vital services for the American people – are acceptable. Biden and Democrats in Congress need to stay the course and do whatever it takes to raise the debt ceiling in a “clean” manner. At this point, further engaging with Republicans will only serve to legitimize their illegitimate views on the debt and spending, which is not something they want to do.
As the US inches closer and closer to defaulting on our national debt, the threat of a global economic crash becomes more and more likely. We officially surpassed the debt limit – which Congress raised to $31.4 trillion in 2021 – on January 19 of this year. Since then, the Treasury Department has used accounting tricks known as “extraordinary measures” to keep the government running and pay our bills. Last week, however, Treasury Secretary Janet Yellen warned that we could run out of money and default on our debt as early as June 1 if lawmakers do not act in time to raise or suspend the debt ceiling.
This default would be nothing less than catastrophic. If we failed to make good on our debts, it would result in, according to some estimates, no less than 8 million Americans losing their jobs. The government would not have enough money to pay bondholders, Social Security recipients, or members of our armed forces. The effects would not just be felt at home but abroad as well, as US treasuries would no longer be seen as the world’s safest asset. The status of the dollar as the world’s reserve currency would evaporate, making the value of the dollar decline and making international goods more expensive for American consumers.
With potentially less than one month until a default, President Biden is meeting today with top Republican and Democratic officials at the White House to discuss the situation. While both parties say they want to resolve the situation, there appears to be a disconnect when it comes to concern with the issue at hand and a willingness to take appropriate measures to fix it. Republicans see this looming threat not as a problem, but as an opportunity. They want to use it to extort Democrats into passing a debt ceiling increase with “strings attached” in the form of enormous cuts to federal spending.
To this end, last month, the Republican-controlled House passed the Limit, Save, Grow Act, which raised the debt ceiling in exchange for a 14% cut in federal spending and significant rollbacks of several parts of the Inflation Reduction Act. On the other hand, Democrats want to pass a “clean” measure increasing the debt ceiling, with no strings attached, in accordance with the fact that the national debt and spending appropriations are two separate things that should be handled separately.
No one in the press wants to say it (because no one wants to be accused of partisan finger-pointing), but we will: on this issue, Democrats are right and Republicans are wrong. That’s the end of it.
There is nothing to “discuss” or “negotiate” when it comes to the debt ceiling. There is no “both sides” to this issue. The debt ceiling is all about paying our bills for things we have already purchased. If you rack up thousands on a credit card, you can’t just *not* pay your bills – you MUST repay them, or else you run the risk of going bankrupt and the bank repossessing your house and car. In the same way, we MUST pay back our nation’s bills, or we run the risk of crashing the entire global economy. This cannot be allowed to happen.
Republicans can rant and rave about how high the national debt is and how much we spend, but the truth is that they did not care about the debt or the debt ceiling at all when Donald Trump was President. If they were so concerned about the deficit, they wouldn’t have passed the 2017 Tax Cuts and Jobs Act and given $2.3 trillion away to the wealthy and corporations and would instead get behind our mission to have the likes of Elon Musk and Jeff Bezos start paying taxes. They also wouldn’t have snuck into their recent plan a provision that allows wealthy tax criminals to get away with illegally avoiding taxes, a change that would actually increase the debt by $120 billion.
There are several things that Biden and the Democrats can do moving forward to avoid a catastrophic default and also protect Americans from unnecessary cuts to vital public services. Among other things, they can:
- Bypass House Speaker Kevin McCarthy and pass a discharge petition to raise the debt ceiling. Democrats would only need five moderate Republicans to sign a petition that would allow a clean debt ceiling bill to reach the House floor for consideration.
- Pursue a constitutional challenge to the debt ceiling. There is a clause in the 14th Amendment that some experts believe give President Biden the authority to continue to pay our bills without any change to the debt ceiling. It reads: “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.”
- Mint a $1 trillion coin and deposit it at the Federal Reserve to pay down a portion of our debt and give ourselves some more time.
We have raised the debt ceiling no fewer than 78 times in the past. We’ve gotten close to defaulting – most notably, in the 2011 political fiasco where Standard and Poor’s historically downgraded the US’s perfect AAA credit rating to AA+ – but we always managed to make the cut off. But that was the old days, where Republicans still had at least a shred of sense, not to mention decency and decorum. Now, nothing – not even the fate of the global economy – will get in their way.
There’s too much at stake for Biden and the Democrats to allow themselves to be bullied. They must stay the course and demonstrate strength. And they must not blink in the process.
