Tue. Oct 3rd, 2023


The Real News Network

The Fight Over the Debt Limit

7 min read

Since they won a majority in the midterm elections, House Republicans have promised to use a debt-limit bill as leverage to achieve their policy priorities. But it was not until yesterday that they confirmed what those priorities are, passing legislation that they plan to use in debt-limit negotiations.

The House approved the bill in a close vote, 217-215, with no Democratic support. The legislation, championed by House Speaker Kevin McCarthy, would raise the limit on money the government can borrow through next year, reel back President Biden’s climate agenda and force sweeping, unspecified spending cuts. The bill is dead on arrival in the Senate, which Democrats control, and Biden has already said he would not sign it. But Republicans hope it will push Democrats to negotiate. “We lifted the debt limit; we’ve sent it to the Senate; we’ve done our job,” McCarthy said.

The stakes are high. If the U.S. breaches the debt limit, it could be forced to default on its debts. A default could set off global economic calamity because U.S. debt, which underpins much of the financial system, would collapse in value (as I’ve explained before). The U.S. hit the debt limit in January, but the Treasury Department has used so-called extraordinary measures to keep the government from defaulting. Those measures will run out in the coming months.

Republicans are leaning on the economic threat to try to force Democrats to negotiate. Today’s newsletter will look at why Republicans are pursuing this strategy and why Democrats see it as reckless.

What Republicans want

Republicans say the U.S. government has grown too large, that it spends too much and that its debt and deficits are unsustainable. More recently, Republicans have argued that spending cuts will ease inflation. Reducing spending would also give Republicans more leeway in the future to extend tax cuts passed under Donald Trump, which disproportionately benefited wealthy Americans.

But Republicans have failed to act on a smaller-government vision when they have been in power. When they controlled the House, Senate and White House in 2017 and 2018, they increased federal spending and deficits. Pointing to that history, some liberals have argued that House Republicans are simply trying to undercut Biden even at the cost of damaging the economy.

Republicans also face difficult politics. In the debt-limit showdown, they have promised to shield Social Security, Medicare and military spending from cuts. Those programs make up the bulk of federal spending. Without them, balancing the budget or even just reducing spending would require steep cuts to other policies, potentially including Medicaid, food stamps, border security and grants to local police departments.

Some of those programs are popular, and slashing them could upset constituents who rely on them to make ends meet.

The political reality has prompted Republicans to take smaller steps. Originally, McCarthy said he wanted to put the U.S. “on a path towards a balanced budget” within 10 years. His current proposal falls short of that goal. But it would cap some federal spending, reclaim unspent Covid relief funds, roll back the Biden administration’s efforts to boost clean energy, block student loan forgiveness and impose more stringent work requirements for food stamps and Medicaid.

Why Democrats refuse

Democrats have largely resisted negotiating over the debt limit. They have likened Republicans’ tactics to hostage taking, arguing that McCarthy and his allies are using the threat of economic catastrophe to force Biden to agree to draconian spending cuts. Democrats warn that negotiating would set a bad precedent — one that could ultimately hurt Republican administrations, too. Democrats could, for example, refuse to raise the debt limit to try to force a Republican president to agree to increase the minimum wage.

But there is already precedent. Barack Obama’s administration negotiated with Republicans during similar debt-limit showdowns. Some Democrats, including then-Senator Biden, also voted against increasing the debt limit in 2006 to protest the costs of the Iraq war and tax cuts.

Biden and his allies argue that it is time to break that cycle. They say they will negotiate with Republicans on spending after they increase the debt limit, but not before. This matches what other countries do. (Denmark is the only other country with a similar debt limit, but it raises its cap well in advance of reaching it.)

Democrats also object to Republicans’ proposed cuts, which they say would particularly hurt poor and middle-class Americans. They also point out that some proposals, like reducing funding for the I.R.S., would increase the deficit.

Still, Democrats may be forced to negotiate. As long as Republicans control the House, there may be no other way out of a potential economic crisis.

For more

The House legislation would raise the debt limit in exchange for cutting government spending nearly 14 percent over a decade.

The vote was the first big test of McCarthy’s speakership. These are the four Republicans who opposed the bill.

Here’s what’s in the bill.



Jack Teixeira, the National Guard airman accused of leaking classified files, has a history of racist and violent remarks, prosecutors say.

Trump can’t stop Mike Pence from testifying to the Jan. 6 grand jury, a court ruled.

The U.S. will give South Korea a central role in nuclear weapons strategy in any potential conflict with North Korea.

Montana state lawmakers voted to bar a transgender legislator from the House floor for condemning a bill that would prohibit transitional care for minors.

“I am here to try to get my life back”: E. Jean Carroll, who accuses Trump of raping her in the mid-1990s, told a chilling story on the stand.

Many Americans say Biden’s age is a factor in the 2024 presidential race. But polls suggest it might not be so important by Election Day.


Disney sued Gov. Ron DeSantis, arguing that his fight with the company was retaliation for speaking out against a Florida education bill.

On the eve of Fox News’s defamation trial, the discovery by some top executives of offensive texts sent by Tucker Carlson set off a crisis.

British regulators rejected Microsoft’s plan to acquire the video game giant Activision Blizzard, potentially killing the largest consumer technology merger in decades.

Other Big Stories

China’s Xi Jinping and Ukraine’s Volodymyr Zelensky spoke by phone, their first known contact since Russia invaded Ukraine in February 2022.

Pope Francis will allow women to vote at a meeting about the future of the Catholic Church.

Children with autism are lending their voices to transit announcements. It’ll brighten your commute — listen here.


Before seeking capital punishment for the Tree of Life synagogue shooter, prosecutors should consider that Judaism rejects the death penalty, Beth Kissileff, the wife of a survivor, argues.

Walking is twice as risky for Black pedestrians as it is for white ones. Adam Paul Susaneck explains why.

Here are columns by Charles Blow on Biden’s candidacy and by Pamela Paul on DVD delivery.


World War II: These children’s books are full of whimsy. The story behind them is one of heroism and tragedy.

BabyGPT: Watch an A.I. learn to write.

Stolen or original? Ed Sheeran is on trial, accused of borrowing from Marvin Gaye. Listen to famous songs in copyright cases.

Gardening: A tool to cut your weeding time in half.

Advice from Wirecutter: Pick the best instant camera.

Lives Lived: Emily Meggett never measured ingredients or wrote down a recipe until she published a cookbook last year that became a best seller. She died at 90.


N.B.A. playoffs: The Miami Heat eliminated the top-seeded Milwaukee Bucks last night, in a shocking overtime win. The New York Knicks knocked out the Cleveland Cavaliers.

N.F.L. draft: Coaches and executives weigh in on top picks in the draft, which begins tonight.

Fallout at Colorado: Buffaloes head coach Deion Sanders has overseen an exodus since taking charge in Boulder.


A reason to dream

In India, where cricket is by far the most popular sport, a women’s league arrived last month with a splash. Investors poured hundreds of millions of dollars into the league, delivering big paydays for the sport’s biggest female stars, and crowds swarmed the inaugural tournament.

The Times’s Mujib Mashal visited Dharoki, a village in the wheat fields of the Punjab region, where the league’s success has inspired a generation of girls to dream of becoming cricket stars.


What to Cook

This marble cake is buttery and not too sweet.

What to Listen To

These podcasts about fashion examine the place of clothing in pop culture.

What to Watch

“Love & Death,” based on a true story, examines how a mother turned into a killer.

Late Night

Seth Meyers speculated about why Fox fired Carlson.

Now Time to Play

The pangrams from yesterday’s Spelling Bee were antioxidant, oxidant and oxidation. Here are today’s puzzle and the Bee Buddy, which helps you find remaining words.

And here are today’s Mini Crossword, Wordle, Sudoku and Tiles.

Thanks for spending part of your morning with The Times. See you tomorrow. — German

P.S. The Athletic is publishing a book series. The first will rank the 100 best players in N.F.L. history.

Here’s today’s front page.

Sign up here to get this newsletter in your inbox. Reach our team at [email protected].

Source: Read Full Article