The Republican Party is poised to win back the House in November, with FiveThirtyEight giving the GOP a greater than 70 percent chance of flipping Congress’s lower chamber. EricLevitz outlines what this means for Democrats — and the debt ceiling
. Speaking of what President Biden would do if House Republicans sent him a budget that tied the debt-ceiling increase to entitlement cuts, Smith said, “If Republicans are trying to cut spending, surely he wouldn’t try to default.”
Smith’s confidence betrays an awareness of his own irresponsibility. The reason Biden “surely” would not default is that the U.S. failing to make payments on its debt would destabilize the global financial system. The vast and tangled infrastructure of global finance rests to a great degree on a foundation of American Treasury bonds. Since the U.S. is the world’s preeminent economic power, its debt is considered the safest asset one can hold.
The Biden administration is unlikely to cave to Smith’s demands; it has seen this show before. But House Republicans can’t necessarily be trusted to fold. In the Trump era, the party’s rank and file have been growing steadily more detached from reality; Republicans beholden to the Chamber of Commerce have been replaced with ones beholden to QAnon fanatics. It’s far from clear that a Speaker McCarthy would be able to marshal the votes necessary to avoid engineering an economic cataclysm.
Second, and most important, Democrats must effectively abolish the debt ceiling. Assuming Republicans win the House in November, the new majority won’t take the reins until January 2023. Between Election Day and then, Democrats will have the opportunity to use the reconciliation process to pass a budget bill without needing to overcome a Senate filibuster .
But no such bill can pass without Biden’s support, and he told reporters that abolishing the debt limit would be “irresponsible.” In so doing, he affirmed the GOP’s fiction about what raising the debt ceiling actually means, while leaving the economy at its mercy. If the Republican Party’s commitment to brinksmanship threatens to upend the global financial system, the president’s nostalgic attachment to congressional conventions threatens to do the same..
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