The tentative debt ceiling agreement reached by the White House and Republican leaders would needlessly gash nutrition aid, rental assistance, and education programs, but make it easier for the wealthy to escape their responsibility to pay taxes.
It should virtually sail through Congress, where both parties are dependent on private money to wage political campaigns that essentially lie to the public as much as Rep. George Anthony Devolder Santos, who won a competitive election in New York’s 3rd Congressional District before a bombshell New York Times report revealed that he fabricated his education, work history, and family background during the campaign.
A failure by Congress to deal with its self-imposed debt ceiling before June 5 could trigger a default that would shake financial markets and send the United States into a deep recession, but President Joe Biden has the option of invoking the 14th Amendment, which states, “The validity of the public debt of the United States… shall not be questioned.”
“The agreement represents a compromise, which means not everyone gets what they want. That’s the responsibility of governing,” said Biden. “And, this agreement is good news for the American people, because it prevents what could have been a catastrophic default and would have led to an economic recession, retirement accounts devastated, and millions of jobs lost.”
“McCarthy’s GOP continues its war on the poor, bolstering food insecurity, protecting tax loopholes for the very rich, and bolstering a corrupt and overbloated defense establishment,” said Marianne Williamson, one of two Democratic presidential candidates who are challenging Biden for the nomination.
“Republicans have never cared about fiscal responsibility,” said Democrat strategist Justin Horwitz. “In the debt ceiling negotiations, one of their biggest goals was to cut funding for the IRS, which yields $12 in revenue for every $1 spent. They don’t care about balancing the budget. They care about protecting their donors’ ability to dodge taxes.”
“President Joe Biden capitulates to Republicans with a deal on the debt ceiling and once again, establishment Democrats are selling out the working class,” said Lisa McCormick, one of New Jersey’s leading progressive reformers.
“The debt ‘deal’ between President Biden and the Republicans is actually a savage attack on the most vulnerable – and a vivid example of how corporate greed has corrupted our country,” said human rights lawyer Steven Donziger. “Spending on war increases. Food stamps cut.”
“Right now, Biden has the power to close a $50 billion tax loophole that enriches millionaires and billionaires,” said political commentator David Sirota. “He’s refusing to do that. Instead, the government is slashing food stamps.”
The agreement would impose new work requirements on some recipients of Supplemental Nutrition Assistance Program (SNAP) benefits and Temporary Assistance for Needy Families (TANF) while scaling back IRS funding aimed at collecting overdue payments from rich tax cheats.
In a letter dispatched last week, five U.S. senators told Defense Secretary Lloyd Austin that the Pentagon “can no longer expect Congress or the American taxpayer to underwrite record military spending while simultaneously failing to account for the hundreds of billions it hands out every year.” It appears that Sens. Bernie Sanders, Elizabeth Warren, Ron Wyden, Mike Braun, and Chuck Grassley were wrong.
Biden and Republican Speaker Kevin McCarthy are sparing the military from draconian cuts while they agreed to impose more punitive work requirements on SNAP recipients, which one senator said will “take food away from hungry kids.”
Hardline Republicans who have demanded more aggressive austerity measures are already threatening to sink the deal, which suspends the debt ceiling until January 2025, after the November 2024 presidential election, in exchange for caps on spending and cuts in government programs.
Progressive Democrats have said they would not support any deal that has additional work requirements.
In the year 2000, the U.S. government debt was $5.7 trillion, equal to 43 percent of the Gross Domestic Product (GDP). By 2020, the debt was $26 trillion, equal to 142 percent of GDP.
With GDP now at $26.5 trillion and debt approaching $32 trillion, being equal to 120 percent of GDP, the situation has improved under the Democratic president, but America’s current debt crisis was manufactured by Republicans in order to compel domestic spending cuts.
Rather than slashing America’s vast military expenditures, collecting $240 billion from wealthy tax cheaters or enacting improved Medicare For All, or universal health insurance that would save the country $650 billion, President Biden caved.
Rather than declare that the 14th Amendment makes the debt ceiling irrelevant, President Biden capitulated.
Instead of repealing the Trump tax cuts, the Bush tax cuts or the Reagan tax cuts, Biden once again surrendered to unreasonable Republican demands.
The single biggest reason for this debt is the U.S. government’s addiction to war and military spending.
According to the Watson Institute at Brown University, the cost of U.S. wars from fiscal year 2001 to fiscal year 2022 amounted to a whopping $8 trillion. Another $7 trillion in red ink resulted from budget deficits caused by incidents that occurred during Republican presidencies, the 2008 financial crisis, and the coronavirus pandemic.
“To surmount the debt crisis, America needs to stop feeding the Military-Industrial Complex (MIC), the most powerful lobby in Washington,” said Professor Jeffrey D. Sachs, director of the Center for Sustainable Development at Columbia University.