The Fight Over the Debt Limit

Since winning the majority in the midterm elections, House Republicans have promised to use the debt limit bill as leverage to achieve privacy priorities. But it wasn’t until yesterday that he confirmed what those priorities were, passing legislation to be used in debt limit negotiations.

The House approved the bill by a close vote, 217-215, with no Democratic support. The legislation, championed by House Speaker Kevin McCarthy, would raise the limit on how much money the government can borrow until next year, rolling back President Biden’s climate agenda and forcing sweeping, unspecified spending cuts. The bill died when it reached the Senate, which is controlled by Democrats, and Biden has said he will not sign it. But Republicans hope it will push Democrats to negotiate. “We lifted the debt limit; we’ve sent it to the Senate; we’ve done our job,” McCarthy said.

The stakes are high. If the U.S. violates the debt limit, it could be forced to default on its debt. A standard can kill the global economic disaster because US debt, which underpins much of the financial system, will collapse in value (as I have explained before). The US reached its debt limit in January, but the Treasury Department has used extraordinary measures to keep the government from defaulting. The move will expire in the coming months.

Republicans are leaning on economic threats to try to force Democrats to negotiate. Today’s newsletter will look at why Republicans are pursuing this strategy and why Democrats see it as frivolous.

What Republicans want

Republicans say the US government is getting too big, spending too much and the debt and deficits are unsustainable. More recently, Republicans have argued that spending cuts will reduce inflation. Reducing spending will also give Republicans more freedom in the future to extend tax cuts through Donald Trump, which disproportionately benefited wealthy Americans.

But Republicans failed to act on their vision of smaller government when they came to power. While in control of the House, Senate and White House in 2017 and 2018, he increased spending and the federal deficit. Pointing to that history, some liberals have denied the House Republicans are just trying to undercut Biden even at the cost of damaging the economy.

Republicans also face tough politics. In the debt limit show, he promised to protect Social Security, Medicare and military spending from cuts. These programs make up the majority of federal spending. Without them, balancing the budget or even simply reducing spending would require steep cuts to other policies, which could include Medicaid, food stamps, border security and funding for local police departments.

Some of these programs are popular, and cutting them could upset constituents who rely on them to make ends meet.

Political realities have led Republicans to take smaller steps. Originally, McCarthy said he wanted to put the US “on the path to a balanced budget” within 10 years. His current proposal falls short of that target. But it would cap some federal spending, restore unused Covid aid funds, reverse the Biden administration’s efforts to increase clean energy, block student loan forgiveness and impose stricter work requirements for food stamps and Medicaid.

Why are Democrats rejecting it?

Democrats have largely rejected negotiations on the debt limit. He compared the Republican tactic to hostage-taking, arguing that McCarthy and his allies used the threat of economic disaster to force Biden to agree to draconian spending cuts. Democrats warned that negotiations would set a bad precedent — one that could hurt Republican administrations. Democrats can, for example, refuse to raise the debt limit to try to force the Republican president to agree to increase the minimum wage.

But there is a precedent. Barack Obama’s administration is negotiating with Republicans over the same debt limit showdown. Some Democrats, including Senator Biden, also voted against increasing the debt limit in 2006 to protest the cost of the Iraq war and tax cuts.

Biden and his allies argue that it’s time to break the cycle. He said he would negotiate with Republicans on spending after raising the debt limit, but not before. This is in line with what other countries are doing. (Denmark is the only other country with a similar debt limit, but will increase the cap before reaching it.)

Democrats also objected to the cuts proposed by Republicans, which they said would primarily hurt poor and middle-class Americans. He also pointed out that some proposals, such as reducing funding for the IRS, would increase the deficit.

However, Democrats may be forced to negotiate. As long as Republicans control the House, there may be no other way out of a potential economic crisis.

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• On the eve of the Fox News defamation trial, the discovery by several top executives of offensive texts sent by Tucker Carlson caused a crisis.

• British regulators have rejected Microsoft’s plan to acquire video game giant Activision Blizzard, which could have killed off the biggest consumer technology merger in decades.

Another Big Story

• China’s Xi Jinping and Ukraine’s Volodymyr Zelensky spoke by phone, the first known contact since Russia invaded Ukraine in February 2022.

• Pope Francis will allow women to vote in a meeting on the future of the Catholic Church.

• Autistic children give voice to announce transit. It will light up the commute – listen here.

The opinion

Before seeking the death penalty for the Tree of Life synagogue shooter, prosecutors must consider that Judaism rejects the death penalty, Beth Kissileffhis surviving wife, denied.

Walking is twice as risky for black pedestrians as it is for white people. Adam Paul Susaneck explain why.

Here is the by column Charles Blow about Biden’s candidacy and by Pamela Paul on DVD delivery.

NBA playoffs: The Miami Heat eliminated the top-seeded Milwaukee Bucks last night, in a thrilling overtime victory. The New York Knicks defeated the Cleveland Cavaliers.

NFL Draft: Coaches and executives weigh in on the top picks in the draft, which starts tonight.

Fallout in Colorado: Buffaloes head coach Deion Sanders has overseen the exodus since taking charge in Boulder.

ART and IDEAS

A reason to dream

In India, where cricket is the most popular sport, the women’s league arrived last month with a splash. Investors poured hundreds of millions of dollars into the league, offered huge salaries to the sport’s biggest female stars, and crowds flocked to the inaugural tournament.

The Times’ Mujib Mashal visits Dharoki, a rice paddy village in the Punjab region, where the league’s success has inspired a generation of girls to dream of becoming cricket stars.

The results of yesterday’s Spelling Bee are: antioxidants, oxidants and oxidation. Here’s today’s puzzle and Bee Buddy, which helps you find the remaining words.