The administration has already taken the first step. Appearing on MSNBC this month, Jared Bernstein, a member of the White House Board of Economic Advisers, warned: “Unless the debt ceiling is raised unconditionally…not only will you default, but the result will be, as you mentioned, the loss of millions of jobs, but also a spike in interest rates.” He added that violating the entire faith and credit of the US dollar would undermine one of the “world’s most pristine currencies”.
The White House and Congressional Democrats have also pointed to the dire economic ramifications of the GOP’s actions during the 2011 debt ceiling deadlock. As the Associated Press reported, “When the August 2011 deadline came to raise the debt ceiling, only an 11th-hour deal with Senate Republicans led by Mitch McConnell and some Democrats commissioned a ‘supercommittee’ to recommend further federal cuts , make sure there is no debt restructuring. Shaken by the political crisis in Washington, credit markets for the first time downgraded the country’s credit rating, driving up the cost of future borrowing.”
In highlighting the threat, the White House has already pinned the blame for a possible 2011 repeat on the backs of MAGA House Republicans. President Biden can remain firm in his position that the debt ceiling is non-negotiable. And he can remind Republicans that during the Trump administration they raised the debt ceiling three times unconditionally — and that they must raise it again or they will take full responsibility for the subsequent collapse. This tactic reinforces the perception that Republicans are merchants of chaos.
Next comes Part 2. Democrats — aided by Senate Republicans who have made it clear they don’t want to be part of this reckless game of chicken — are challenging Republicans to come up with a plan.
As Senate Majority Leader Charles E. Schumer (DN.Y.) said on the Senate floor Monday, “If House Republicans are serious about holding the debt limit hostage in exchange for spending cuts, the new rules they passed require that they take a proposal to the floor. of the House and show the American people exactly what kind of cuts they want to make. It’s not enough to hide behind the old GOP talking point about “wasteful spending”; if you’re in the majority, the substance counts.
He added for the record, “Americans are going to be left with some pretty big questions. Republicans say they want cuts. Does that mean social security cuts? Or Medicare? Or childcare? Or Pell grants? Or our army? Or pay raises for our troops? Or funding police and law enforcement?”
Republicans never gave much importance to fiscal sobriety when their party controlled the White House. This was especially true during the Trump administration, which, as conservative economist Charles Blahous showed in a 2021 study, deserves a significant share of the blame for the deficits of recent years.
But when the Democrats are in the White House, the Republicans come up with all sorts of plans to cut spending, including entitlements. It was unpopular when Paul D. Ryan advocated such cuts in 2012 (even mainstream Republicans ran from the proposals); it would be just as politically disastrous for Republicans to try them again today.
In short, the Republicans are doing the Democrats’ work for them. Beckoning economic catastrophe, the GOP is pushing for draconian cuts that even its own base doesn’t want. Why should the Democrats stop them?