A debt ceiling fight ending with a whimper not a bang
It’s not over yet, because Kevin McCarthy still has to round up enough votes to get past the Hastert Rule (GOP can’t bring a bill to floor with a majority of Democratic votes) and he might still face a motion to vacate the chair when all is said and done (which is his problem, not ours) it appears that creaky old Joe got the best deal we could have expected, most importantly an agreement to extend the debt limit until after the next election. Donald Trump hasn’t said a word yet. Whether he whips against voting for it is unknown. But you can bet he is not happy about it.
Here’s Dave Dayen at the American Prospect with the view from the progressives:
With one potentially major exception, the relative harm and help was kept to a minimum in the final agreement. It will only be a little bit easier to commit wage theft, or to sell defective or poisoned products. It’ll only be a little harder to get rental assistance or tuition support. Only a few people will be freer to pollute the environment; only a few will find it more difficult to get food. The Internal Revenue Service will only be a little worse. A lot of things will stay the same. Almost nothing will get any better.
That’s the broad strokes of a deal that the White House and House Republicans are selling to their respective bases right now. (House Republicans held a meeting immediately after the agreement was made last night; the White House isn’t holding anything for Democrats until this afternoon, after the bill text is supposed to be posted.) It will dictate federal spending on domestic discretionary programs for two years, and it will raise the debt ceiling for two years. After that, depending on the composition of Congress, we’ll all be here again. The stakes for the 2024 election just got even higher.
Imagine a world where we were a normal country with no debt ceiling, but everything else was exactly the same. Thanks to gerrymandering and the malpractice of the New York Democratic Party, Republicans still have the House, and the budget for the current fiscal year still expires on September 30. Republicans and Democrats would still have to negotiate that budget, and one likely outcome of that would be that negotiations fall apart, that there’s just no way to reconcile what both sides want. In that case, either the government shuts down or a continuing resolution is struck, which means that the government would operate at the current funding levels for a period of time. Maybe we’d live under a CR for the entire two years of this Congress.
That’s approximately what happened in this agreement. The funding levels for fiscal year 2024 on the non-defense discretionary side are at FY2023 levels. House Republicans are saying they clawed things back to FY2022, but a number of funding shifts—most prominently the return of tens of billions of dollars in unspent COVID aid—backfill the non-defense discretionary budget to get it to around FY2023. (The IRS money from last year’s Inflation Reduction Act also adds to this backfill, but while some reports still list that as a $10 billion fund shift, others put it as low as $1.9 billion, which is a little more than 2 percent of the total $80 billion outlay). This cap then rises by one percent in FY2025.
The goal here was to allow both sides to say contradictory things to their members. Republicans can say they achieved the target of the Limit, Save, Grow Act to limit discretionary spending to FY2022; Democrats can say they only froze spending at current levels. And both are sort of right.
Meanwhile, military spending, which is magic and has no impact on the federal budget, actually rises in FY2024 to the level in the Biden budget. (House Republicans wanted it even higher.) Veterans spending has similar privilege, and rises as well. Mandatory spending, like Social Security and Medicare, isn’t touched as well.
The New York Times estimates that this will cut $650 billion in spending over ten years, but only if spending rises at the rate of inflation after the caps lift. That’s highly uncertain: a Democratic government could restore all the cuts, while a Republican government could cut further.
In other words, not great, but not catastrophic.
Here’s Dan Pfeiffer on the politics:
Biden Outplayed McCarthy
Everyone can debate about how we got to this moment until the end of time. I wanted Democrats to include a debt limit extension in the Inflation Reduction Act. Like many others, including the Biden White House, I wanted the Democrats to use the lame duck session to take this legislative weapon of mass destruction off the table. Others wanted the President to ignore the debt limit and cite the 14th Amendment . There is a good faith debate to be had about the wisdom of abandoning the White House’s no-negotiation stance. But this is where we are. Once the House Republicans took over with a looming debt limit expiration, all good options were off the table. There were only suboptimal outcomes on the menu.
The President made a judgment that this budget process was the best way to avoid default and the outcome is better than many thought possible a few days ago.
The spending numbers demonstrate what would have happened this fall if the parties were forced to negotiate a budget agreement to fund the government for next year. Those sorts of cuts were inevitable the moment the Republicans won the House. Our most pressing needs are already underfunded, so these cuts will hurt people. The cuts represent the worst kind of opportunity cost. But once again, they could have been worse.
Budget caps expire after 2025. This is a massive victory when you consider that McCarthy demanded ten years of budget caps.
Joe Biden always says “Compare me to the alternative, not the Almighty.” No Democrat would choose this deal, but the alternatives were default or the “Limit, Save, Grow Act” passed by House Republicans. McCarthy told his allies that his bill was the floor, not the ceiling, of what they could expect by holding the global economy hostage. His proposed bill included devastating cuts in veterans’ health care, cancer research, education, and food safety. The GOP approach would have destroyed thousands of manufacturing jobs by repealing the Inflation Reduction Act.
None of that is included here.
I want to hold out judgment on the work requirements until I see the details, but based on what we know, Biden limited the damage demanded by the GOP.
There’s not much to love in this deal for progressives, but Biden seems to have preserved all of the climate funding from the Inflation Reduction Act. If that’s the case, it’s a big win.
The deal is not great, but it’s a far cry from what the Republicans wanted. Notably, the Republicans played their best card, and all they got was a suboptimal budget deal.
For the next several days, the President and his team cannot toot their own horn. McCarthy, a notoriously bad vote counter, still needs to round up a majority of his Far Right caucus. The MAGA media and Trump loyalists will crap on the deal and pressure fellow Republicans to vote no. Every triumphant tweet and attempt to tout the decency of this deal will make it harder for McCarthy to round up the votes. Therefore, the White House will remain quiet while the Republicans obnoxiously crow about how they took Biden’s lunch money. But if the White House can’t say it, I will.
Joe Biden played a very tough hand well. He got a better deal than many thought possible, and he forced the Republicans to adopt a series of very unpopular positions that they will have to own on the campaign trail next year.
There is nothing inspirational about “could’ve been much worse.” No one will run to the polls or volunteer to make phone calls because Democrats “limited the damage.” But the debt limit was President Biden’s first showdown with the MAGA Republican House. All things considered, he navigated it quite well.
Now, let’s hope McCarthy has learned to count votes since the last debt limit crisis.
I think Democrats should be careful about taking a victory lap because the wingnut snowflakes are very delicate and could balk. So, just between us: McCarthy told Fox News, “There’s not one thing in this bill for Democrats” but he is wrong. Biden got the biggest win of all although I’m not sure people realize how big it is. Agreeing to lift the debt ceiling past the election is huge. Trump wanted them to have this fight next spring so that he could fatuously claim that when he was president this chaos never happened (because Democrats aren’t terrorists) and throw the economy into turmoil before the election. That’s not going to happen. neither is a government shut down because they have agreed to fund the government for two years. All the arguments over the budget are over until after the 2024 election. That’s huge.
All that’s going to be happening until 2025 are idiotic culture war arguments and investigations, mostly criminal and mostly against Donald Trump and his cronies. I would say that gives Democrats the advantage. If the economy continues on its current path, they should be in pretty good shape to wage the battle.
A smattering of comments from this morning:
That’s what makes them truly happy. Making foreigners suffer and, in the process, make it easier for another pandemic to come and kill their own followers. Death cult.
What they’re saying about the vote:
That’s almost surely true. Matt Gaetz has been saying that publicly. The real question is whether six of them decide to flex their muscle and put McCarthy through another fraught speaker vote.
Oh my. Does Trump realize what McCarthy’s saying there????