House speaker Kevin McCarthy (R-CA) was in New York City today, trying to calm jitters among investors by explaining to members of the New York Stock Exchange that the Republicans will not allow the government to default on its debts even as he insisted that the Republican Party must use the debt ceiling to enact legislative policies it can’t win through normal political negotiations.
The debt ceiling is an artificial limit to how much the Treasury can borrow to pay existing obligations to which Congress has already committed. It has nothing to do with future spending, which is hammered out in budget negotiations.
But McCarthy has not offered a budget proposal because the Republican conference cannot agree on one. Yesterday, for example, McCarthy floated the idea of cuts to food assistance for millions of low-income Americans, which Senate Republicans want no part of. Unlike House members, many of whom represent such gerrymandered districts they feel insulated from any backlash to extreme proposals, Senators run at-large. For them, cutting food support while backing tax cuts for the wealthy and corporations would be politically dangerous.
Instead, McCarthy is trying to use the threat of national default to extract the cuts extremist members of his conference want. The Biden administration has made it clear that it will not negotiate over paying the nation’s bills, especially since about a quarter of the debt was accumulated under former president Trump, $2 trillion of it thanks to tax cuts for the wealthy and corporations. In those years, Congress raised the debt ceiling three times. Biden presented his own long, detailed budget, full of his own priorities, as a start to negotiations in March, and he says he is eager to sit down and hammer out the budget once McCarthy produces his own plan. McCarthy is trying to deflect from his inability to do that but is confusing the issue, suggesting that he has the right to negotiate instead over whether or not to pay our bills.
Since defaulting, or even approaching default, would devastate both the U.S. and the global economy, not even all Republicans back McCarthy’s threats. When Sara Eisen of CNBC asked McCarthy if he had the support of his party for what he is proposing, McCarthy answered, “I think I have the support of America,” and that he would “get the party behind it.”
Meanwhile, when asked about a potential default, Mark Zandi, the chief economist at Moody’s Analytics, told Tony Romm of the Washington Post, “It will be financial chaos…. Our fiscal problems will be meaningfully worse.… Our geopolitical standing in the world will be undermined.”
Today, McCarthy offered to kick the can down the road by a year, raising the debt ceiling so long as the Democrats agree to cuts that he described only vaguely. Senate majority leader Chuck Schumer (D-NY) rejected this idea out of hand, saying: “If Speaker McCarthy continues in this direction, we are headed to default.” Schumer reiterated that the Democrats will be happy to negotiate with McCarthy over the budget when he can produce a detailed plan that can get the 218 votes it needs to pass the House. He noted that McCarthy’s vague proposals are “a recycled pile of the same things he’s been saying for months, none of which has moved the ball forward an inch.”
In part, McCarthy’s problem is that many of the members of his conference are in the majority for the first time. They are discovering that it is much easier to say no when opponents are in charge than it is to hammer coalitions together to advance realistic legislation. In the New York Times today, editorial board member Michelle Cottle called many of the current House Republicans “chaos monkeys” but noted that it is McCarthy’s fault that he gave them so much power by promising things he can’t deliver—like refusing to hike the debt ceiling without cuts—and by putting them at the head of important committees.
Ohio representative Jim Jordan, for example, sits at the head of the Judiciary Committee, as well as the Select Subcommittee on the Weaponization of the Federal Government, and his investigations so far have not produced the results he promised the Republican base. As Jesse Watters of the Fox News Channel put it last month: “Make me feel better, guys. Tell me this is going somewhere. Can I throw someone in prison? Can someone go to jail? Can someone get fined?”
Instead, Democrats on the committees have met Jordan’s wild rapid-fire accusations with facts that show the difference between unchallenged myth-making on right-wing media and actual governance. Today, at Jordan’s insistence, the Judiciary Committee held a hearing in New York City, a venue Jordan suggested was chosen to highlight how the policies of Manhattan district attorney Alvin Bragg had exacerbated violent crime, although in reality, Jordan’s attacks on Bragg for investigating former president Trump started even before Trump’s indictment in that jurisdiction.
Jordan set out to argue that Bragg was neglecting violent crime in New York City only to have Democrats point out that New York City is “not only safer than most large cities in America, it is safer than most cities of any size, and on a per capita basis, New York City is safer than most of the states of the members sitting...on the majority side,” as Jim Kessler, the co-founder and senior vice president for policy for Third Way, explained. Indeed, in 2020, Ohio’s murder rate was higher than the rate in New York City. Representative David Cicilline (D-RI) asked Jordan if the hearing could be moved to Ohio.
If one part of McCarthy’s problem is his extremist colleagues, another is that his argument is out of date. In what Catie Edmondson and Jim Tankersley of the New York Times called “a speech that was sprinkled with misleading statements and erroneous assertions,” McCarthy told the Wall Street executives, “We’re seeing in real time the effects of reckless government spending: record inflation and the hardship it causes….”
In reality, the inflation that plagued the U.S. as it reopened from the worst days of the Covid-19 pandemic has slowed dramatically, making it clear that the policies of the Biden administration are working. As Jennifer Rubin noted yesterday in the Washington Post, the annual inflation rate for producers is 2.7%—the lowest rate in more than two years—while consumer price increases are at their lowest point since May 2021: 5%. Gasoline prices have dropped 17.4% since the high prices that followed Russia’s invasion of Ukraine. The overall declines mark nine months of slowing inflation.
At the same time, labor force participation is at record high levels and unemployment is at a 50-year low of 3.5%. Black unemployment, which stands at 5%, has never been lower. Real incomes—that is, incomes after inflation is factored in—have risen 7% for those making $35,000 a year or less and 1.3% across the whole economy. Meanwhile, the deficit has dropped more than $1.7 trillion in two years.
The successes of Biden’s policies would seem worth considering in negotiations, but as Sarah Longwell noted in Bulwark+ today, the Republican Party has abandoned normal democratic politics. She notes that it is a mistake to look at the Trump years as a wild period from which the party will return to normality. Instead, she notes, “You have to think of Trump’s election as year zero” because “Republican voters say they don’t want any part of a Republican party that looks anything like it did before 2016.”
Trump’s administration was a culmination of forty years of Republican attempts to get rid of taxes and regulations by insisting that anyone calling for business regulation and a basic social safety net was a socialist who wanted to redistribute tax dollars from hardworking white men to minorities and women. But the racism, sexism, and religion in that formula used to be the quieter undertones of the call for small government. Now, though, the party is openly embracing the replacement of democracy with a strong government that would make white Christian nationalism the law of the land.
In illustration of that position, Florida governor Ron DeSantis, who has used the government to impose a Christian agenda on his state, today continued his crusade against the Walt Disney Company. A year ago, angry that then–chief executive officer Bob Chapek opposed his measure limiting discussion of gender identity in public school classrooms, DeSantis tried to take control of the company’s special self-governing district through a new board. Shortly before the takeover, Disney CEO Bob Iger outfoxed DeSantis by legally changing the terms of the agreement under which it has operated for decades, limiting the power of the board in perpetuity.
After Trump officials mocked him for being beaten by Mickey Mouse, DeSantis today suggested he is determined to use the power of the government to force Disney, a private company, to bend to his authority. He threatened to build a rival amusement park or a state prison on land next to Disney’s Florida park.
Disney promptly responded by advertising a “first-ever Disneyland After Dark” LGBTQIA+ themed event night at its California Disneyland resort, and former Republican National Committee chair Michael Steele tweeted: “When families stop visiting & Disney’s $75.2B economic impact & $5.8B tax revenues drop; its 75K employees face layoffs & 463K jobs are also imperiled what would your analytics say caused that to happen? WTF, Dumbo.”
John Kelly described Trump in his book as "the most determinedly ignorant person I ever met." The entire rest of the party, office holders to voters are determined to publicly celebrate their malicious, malevolent moron ignorance.
Jim Jordan, the loud-mouth of the GQP party, is truly the most vile and evil of the bunch but he is also very ignorant. Bragg could actually grab his little scrotum and throw his body over a fence, if his lawsuit prevails. Honestly, has he never been to NYC before? Does he know the patience level of New Yorkers is off the Richter Scale? The Dems came out swinging, bless them. But then there’s Qevin...who set himself up at Wall Street, trying to allay their fears. That didn’t go over too well. Why? Because all Qevin knows is how to run an ice cream shop, not a budget for an entire country. What an ASS! They all are.