Many of my fellow progressives won't like my opinion, but I'm happy with the debt limit deal reached today between President Biden and House Speaker McCarthy.
The deal is going to irritate those on both the far-left and far-right of the political spectrum, so passage of the legislation isn't assured. But the alternative -- defaulting on the nation's financial obligations -- was much worse.
A New York Times story provides some basic facts about the deal.
President Biden and Speaker Kevin McCarthy on Saturday reached an agreement in principle to lift the debt limit for two years while cutting and capping some government spending over the same period, a breakthrough after a marathon set of crisis talks that has brought the nation within days of its first default in history.
Congressional passage of the plan before June 5, when the Treasury is projected to exhaust its ability to pay its obligations, is not assured, particularly in the House, which plans to consider it on Wednesday. Republicans hold a narrow majority in the chamber, and right-wing lawmakers who had demanded significantly larger budget cuts in exchange for lifting the borrowing limit were already in revolt.
But the compromise, which would effectively freeze federal spending that had been on track to grow, had the blessing of both the Democratic president and the Republican speaker, raising hopes that it could break the fiscal stalemate that has gripped Washington and the nation for weeks, threatening an economic crisis.
Biden had correctly said that he wouldn't negotiate over raising the debt limit, since this only enables payment of money that already has been authorized by Congress and signed into law by the president. However, Biden also said that he'd negotiate the contours of federal spending for the next fiscal year and beyond.
That was simply political reality.
Spending bills originate in the House. The House is controlled by Republicans. So it made sense to talk about federal spending now with House Republicans. If Biden had refused to negotiate on spending, especially after the House had passed a debt limit bill that contained a GOP spending wish list, he would have looked foolish and irresponsible.
Progressives tend to ignore this fact. Compromises on federal spending were going to occur at some point given the GOP majority in the House. Those compromises were hammered out now, rather than later.
All in all, I think Democratic priorities ended up doing fine in the deal. Not great, but fine. That's the nature of political deal-making: nobody gets all they want.
The debt limit is increased for two years, putting it off limits until after the 2024 election. A spending freeze also is for only two years. The House GOP wish list had large spending cuts extending over ten years, a big difference.
The wish list called for doing away with climate action policies in the Inflation Reduction Act bill. Those won't happen, which is great. Only $10 billion of the $80 billion in increased funding for IRS enforcement of our tax laws is being shifted to other parts of the budget. Not good, but acceptable.
Yes, there are work requirements for federal aid in the deal. But they could have been worse. The New York Times story says:
According to a person familiar with the agreement, it also would impose new work requirements for some recipients of government aid, including food stamps and the Temporary Assistance for Needy Families program. It would place new limits on how long certain recipients of food stamps — people under the age of 54, who do not have children — could benefit from the program. But it also would expand food stamp access for veterans and the homeless, said the person, who spoke on condition of anonymity because they were not authorized to discuss details of the package.
As I said in a blog post where I predicted a debt ceiling catastrophe, which is still possible but much less likely now, one of my fears was that House Republicans would tank the economy by not raising the debt limit, thereby seriously hurting Biden's reelection chance.
Biden seems to think that congressional Republicans want to ensure that our country doesn't enter a deep recession, or even a depression, due to full faith in the credit worthiness of the federal government taking a nose dive because of an inability to pay its bills.
Actually, Republicans want to take back the presidency in 2024, along with control of both the House and Senate. The best way to do that is for Biden and Democrats to be saddled with a massive economic downturn.
Which is what defaulting on our debt would do.
The Freedom Caucus effectively controls the House of Representatives. Those far-right members got promises from Kevin McCarthy in return for giving him the backing to become Speaker of the House after 15 votes.
I don't see the Freedom Caucus being satisfied with any debt ceiling agreement that Biden is willing to sign and congressional Democrats are willing to support. Again, maybe I'm wrong.
Perhaps McCarthy has a political cattle prod that will jolt the Freedom Caucus into supporting a much pared down version of the extreme debt ceiling bill passed by the House with exactly zero votes to spare. This just seems very unlikely to me.
It still seems unlikely, given the nature of the deal worked out by McCarthy and Biden. Democratic votes will be needed to get the deal across the finish line in the House. Some ardent House progressives will refuse to provide those votes, but enough Democrats should join with enough Republicans to get the bill passed.
Then it goes to the Senate, where some GOP members will oppose it. However, while they will be able to slow down passage of the House debt limit bill, I don't see them being able to kill it. That would saddle Republicans with the responsibility for orchestrating the first default on our debt in the nation's history -- not something the GOP wants with an election coming in 2024.
So, yeah, congressional Democrats came out of the debt ceiling negotiation with about as good a deal as was possible for them.
Their crucial mistake was not raising the debt ceiling on their own when they had control of both houses of Congress and the presidency. House Republicans can't be blamed for using the debt ceiling as leverage given that this opportunity was available to them. The good news is that this leverage didn't pay off very well for them.