PSL Editorial: Rightwing prepares ‘debt ceiling’ attack – Will Biden capitulate? 

Photo: House Speaker Kevin McCarthy. Public domain

Republican leaders in the House of Representatives have launched their opening attack in what is shaping up to be a dramatic showdown that could see the U.S. government default on its debt. Speaker of the House Kevin McCarthy laid out yesterday the major cuts to social programs that Republicans will be seeking in return for passing legislation that would raise the “debt ceiling.” These measures are aimed to make the rich richer and the poor poorer, and there are mounting concerns that Biden will give them at least part of what they want. 

The debt ceiling is a manufactured crisis. A law passed in 1917 established a limit to the amount of money the U.S. government could borrow. Since 1960, it has been raised 78 times, something that for decades caused little controversy. Only in recent years has the rightwing decided to use it as a point of leverage to try to force through spending cuts — first during the Obama administration after retaking control of Congress in 2010, and now under Biden with their new majority in the House.

McCarthy’s demands are wide ranging. In total, he is seeking $130 billion of cuts, much of which is still to be defined as he attempts to unite various factions of his party. But a few things are already clear. For one, the Republicans will seek to kick millions of people off of food stamps and Medicaid by adding onerous bureaucratic requirements. Billed as “work requirements” in a rhetorical twist that aims to tar beneficiaries as lazy, these new restrictions on eligibility makes the system more confusing, creates unnecessary paperwork and necessitates costly enforcement activities. Food and health care are basic human rights that all should be entitled to regardless of circumstances. 

The Republicans also seek to cut a huge amount of funding from the IRS. But this does not mean that working-class taxpayers will see any form of relief from their tax burden. Instead, this is a maneuver to make it easier for the rich to evade taxes by starving the agency of resources and personnel. As part of last year’s Inflation Reduction Act, $80 billion was earmarked to improve the IRS’s ability to audit corporations and the rich. This is what McCarthy wants to cut.

Another demand is to scrap the student loan debt forgiveness the Biden administration rolled out last year. Although it fell short of full cancellation, the policy would see up to $10,000 of relief for every person with student loan debt and up to $20,000 for Pell Grant recipients. In exchange for lifting the government’s borrowing limit, the Republican leadership wants to bury workers in even more debt. 

So far, Biden is refusing to negotiate over the debt ceiling. But as a potential default approaches, his instincts to surrender to the rightwing could very easily kick in. This was the instinct that led to the failure of his “Build Back Better” reform agenda that would have implemented wide ranging progressive changes to domestic policy. This tendency to seek partnership rather than confrontation with right-wing politics has been a hallmark of Biden’s whole political career — for instance, when he helped pass the racist 1994 crime bill and the anti-worker 2005 bankruptcy law. 

If the Republicans refuse to give in and really do take the country to the brink of default, then Biden could ignore the debt ceiling and order the treasury to continue borrowing as usual. There is a strong constitutional basis to do so. The 14th amendment, one of the “Reconstruction amendments” passed following the Civil War to guarantee equal rights for Black Americans, includes a clause stipulating, “The validity of the public debt of the United States … shall not be questioned.” This was a major issue in the aftermath of the war, during which the government incurred significant debts.

The Biden administration has no reason to surrender. The right-wing politicians’ demands are unpopular and they are divided among themselves over how to wage this fight or even what to ask for. Any concessions given over the course of this phony debt ceiling crisis will be as much on Biden as they are on Republicans. 

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