Discover more from Letters from an American
March 23, 2023
While the latest machinations from Trump are taking up oxygen, the debt ceiling crisis hasn’t gone away. Indeed, just as it is becoming more and more urgent, Republican far-right extremists are becoming more committed to using the opportunity to blow up the economy as a way to get their wishes.
The uncertainty that followed the collapse of the Silicon Valley Bank illustrated just how quick and how dangerous even a relatively minor banking crisis could be, but far-right Republicans are not backing off on their threat to refuse to raise the debt ceiling without concessions from Democrats. Two months ago, in response to a question about “whether you think this debt ceiling is going to be used as a bargaining chip in some way that could turn dangerous?” the chair of the House Budget Committee, Jodey Arrington (R-TX), said, “I believe it will and I believe it has to.”
Now, in the wake of the banking crisis, Arrington says the uncertainty after the banking instability means that “[t]his is the best time to do it.” Republicans are arguing that the inflation of the past year is the result of pandemic-era spending and that by threatening the debt ceiling, they can bring that spending under control.
But let’s be very clear on this: the debt ceiling is not about future spending. It is about the amount of money Congress authorizes the Treasury to borrow in order to pay obligations that already exist. It is not associated with any individual bill, and it is not an appropriation for any specific program. It enables the government to borrow money to pay for programs in bills already passed. If Congress does not raise the debt ceiling when necessary, the government will default on its debts, sparking a financial catastrophe.
Future spending is in the government’s annual budget. The budget process starts when the president submits a detailed budget request to Congress for the fiscal year that starts on October 1, usually by the first Monday in February, though sometimes that is delayed (as it was this year). The president’s budget shows what the administration thinks is important to fund and how much that will cost.
Congress is then supposed to consider the president’s budget, hold hearings to ask administration officials why they need certain items or have gotten rid of others, and then develop its own plan. This budget resolution, as it is called, sets amounts that Congress thinks are appropriate for different parts of the budget. Congress is supposed to pass that budget resolution by April 15 (even though it rarely does). Appropriations bills then fund the items in the budget.
President Biden introduced his detailed budget on March 9, deliberately using it as a way to signal his determination to use the government to help ordinary Americans rather than the wealthy and corporations. He is operating under the belief that the economy grows fastest and does better for most people when the government invests in jobs, education, and social services rather than when it tries to free up as much capital as possible for wealthy investors. This is the Republican plan, which is based on the idea that the wealthy will invest in the economy and create jobs. Biden called for funding programs—while also cutting the deficit—by rolling back the Republicans' 2017 tax cuts for the wealthy and corporations, by imposing a 25% tax on billionaires, and by raising the tax on stock buybacks.
Republicans have attacked Biden’s budget, but they have not produced one of their own. They likely can’t produce one, because the only way for House Republicans to deliver the cost savings they have promised is to cut Social Security and Medicare, cuts they have advocated for years. But at his State of the Union address, when prominent Republicans yelled that he was a liar for suggesting they wanted to cut those popular programs, Biden backed them into vowing not to cut them.
Then, earlier this month, in response to a request from Senators Sheldon Whitehouse (D-RI) and Ron Wyden (D-OR), the Congressional Budget Office wrote that if the Republicans’ 2017 tax cuts for the wealthy and corporations stay in place as Republicans wish and defense spending, Social Security, Medicare, and veterans’ programs are all protected—as Republicans now say they want to do—even zeroing out all other discretionary spending in the budget will not balance it by 2033.
Arrington and Speaker Kevin McCarthy (R-CA) say they will release the Republican budget after April 15, blaming Biden’s own late budget for their delay. But because they have not launched an official plan, they have left an opening for the far-right House Freedom Caucus of around three dozen lawmakers to step into the gap.
On March 10, Representative Lauren Boebert (R-CO) was in front as members of the Freedom Caucus issued a statement laying out the demands they want met before they will consider raising the debt ceiling. They want laws that cut current spending by stopping student loan relief, clawing back all unspent Covid-19 funds, and repealing the $80 billion in appropriations for the Internal Revenue Service and all the monies appropriated by the Inflation Reduction Act for addressing climate change. They want to cap future spending at 2022 levels, claiming a cap will cut “the wasteful, woke, and weaponized federal bureaucracy.” They demand further business deregulation and more work requirements on programs like Medicaid.
If all that gets written into law, Freedom Caucus members “will consider voting to raise the debt ceiling.” Senator Rick Scott (R-FL), whose 11-point plan to “rescue America” was the one Biden pointed to most frequently as a Republican plan to cut Social Security and Medicare because it called for every law to end in five years and have to be repassed, said he was “very optimistic” about the Freedom Caucus’s plan. Just this week, McCarthy added the idea of tying changes to the permitting process for oil and mining development to the debt ceiling.
But, in fact, the things the Republicans call for are not popular in the country, and the administration has been laying out piece by piece how the devastating cuts in the proposal would impact families, consumers, the elderly, and working Americans, all to increase tax cuts for the wealthy and corporations.
In any case, while it claims to be eager to negotiate over the budget, the Biden White House maintains it will not negotiate over the debt ceiling, especially as the current financial woes are attributable in large part to the explosion of the deficit and debt under Trump. Republicans seem hell-bent on doing so, expecting that the Democrats will ultimately back down rather than permit the Republicans to destroy the economy. In the past, Senate minority leader Mitch McConnell (R-KY) has managed to bring Republicans around, but now he is out of commission from his fall.
It is against this backdrop that Republicans have rushed to defend Trump, who is pretty clearly trying to whip up his supporters to violence. His antics have gotten so extreme that he posted an image today of Manhattan district attorney Alvin Bragg beside an image of himself brandishing a baseball bat. Today, citing Trump’s apparent calls for violence, Judge Lewis A. Kaplan ordered that the jurors in the case of E. Jean Carroll’s rape accusations against Trump be kept anonymous for their own safety. The case goes to trial next month.
Republicans seem to be working with Trump to keep him in the news, perhaps aware that he is drowning out both the debt ceiling crisis and their inability to produce a budget.
Three days ago, Jim Jordan (R-OH), James Comer (R-KY), and Bryan Steil (R-WI) demanded that Bragg deliver to them all information related to his investigation into Trump. Today the Manhattan DA’s general counsel Leslie B. Dubeck correctly called their demand an “unprecedented” federal intrusion into an independent local investigation that unlawfully undermined New York’s sovereignty. She added: “The Letter only came after Donald Trump created a false expectation that he would be arrested the next day and his lawyers reportedly urged you to intervene. Neither fact is a legitimate basis for congressional inquiry.” She noted that Trump’s lawyer, Joseph Tacopina, had written a letter to Jordan encouraging Congress to investigate Bragg.
Now a different case is suddenly imperiling Trump. Yesterday a federal appeals court ruled that Trump attorney Evan Corcoran must turn over records to Special Counsel Jack Smith and testify before the grand jury in the investigation into Trump’s theft of classified documents. Judge Beryl Howell said last week that Trump could not use attorney-client privilege to block Corcoran’s participation because prosecutors in Smith’s office had shown sufficient evidence to support the claim that Trump had committed a crime, triggering the “crime-fraud” exception to attorney-client privilege. Trump’s lawyers appealed, and the appeals court agreed with Howell.
A Trump spokesperson told ABC News: "There is no factual or legal basis or substance to any case against President Trump."
Corcoran is testifying tomorrow.