Guest columnist Keith Peterson: Nation's credit at mercy of bare-knuckles politics
Does House Speaker Kevin McCarthy have President Biden right where he wants him?
He has managed to pass a bill by a single vote in the House to raise the debt ceiling and has been able to stand in front of a lot of microphones and say: "We have passed a bill to raise the debt ceiling. Where is the president's bill?"
Senate Majority Leader Chuck Schumer might try to pass a "clean" bill in the Senate next week, but he needs 60 votes and with Senators Manchin and Sinema uncertain and Sen. Feinstein absent, he needs a lot of help from Republicans and there is no indication that is forthcoming.
The House bill (H.R. 2811) would cut federal discretionary spending across the board and cap increases at 1% over the next decade. It would also repeal some of President Biden's achievements - tax credits for green energy, more funds for IRS enforcement (which would cut the deficit by a projected $120 billion) and his proposed student loan forgiveness program.
Moody's Analytics projects that if the House bill were to become law, it would result in the loss of some 800,000 jobs. But perhaps Republicans would be OK with that. A weakened economy in 2024 would improve their chances to take back the White House.
The House bill also contains a time bomb. It would increase the debt ceiling just enough so that Congress would have to come back and have the same negotiation in the spring of 2024 in the heat of the presidential election.
This week, Treasury Secretary Yellen cautioned that the U.S. will hit the debt ceiling earlier than previously projected. Now we are looking at on or about June 1, and next week Congressional leaders will gather in the White House.
It does not matter that we are talking about paying for spending that has already been approved by Congress. It does not matter that Speaker McCarthy voted three times for clean debt ceiling hikes during the Trump presidency. It does not matter that this is all cynical and hypocritical. This is bare-knuckle politics at its ugliest.
All that matters now is what can get 60 votes in the Senate and 217 votes in the House in the next month. The Senate will not pass the House bill, and the president has pledged a veto. The Democrats have not shown they can pass a bill in the Senate.
American voters tell pollsters they want Republicans and Democrats to negotiate and they are worried about federal spending. Since 2000, the federal debt has risen from 56 percent of GDP to 124 percent of GDP because of the dot.com crash, the financial crisis, the massive unfunded Trump tax cuts, the pandemic, the lid on immigration and the war in Ukraine.
No one's hands are clean. Republicans and Democrats have each contributed to this state of affairs.
The president has presented his budget with its priorities. Tax hikes on the wealthiest Americans and corporations would cut the deficit nearly $3 trillion over the next decade. The House bill sets caps, will not touch Social Security or Medicare, but potentially cuts everything else. They have not yet sorted out their priorities other than trying to undo some of the president's hard-won programs.
This is a dangerous moment. Will cooler heads prevail? Would Speaker McCarthy lose his speakership if he compromises? Will the president be forced to buckle? Will the most vulnerable get hurt in the crossfire? Will blame and a political price fall more heavily on Republicans or Democrats or is it a pox on everyone's house?
The full faith land credit and the health of the American economy hang in the balance.
• Keith Peterson, of Lake Barrington, served 29 years as a press and cultural officer for the United States Information Agency and Department of State. He was chief editorial writer of the Daily Herald 1984-86.