We are two weeks past the deadline for the U.S. government to continue borrowing, or the debt limit. For 2023, it is estimated that the nation must borrow $100 billion each month to meet its obligations.
We are now in "extraordinary measures" that must be taken by the Treasury Department to duct tape together finances while Congress and the White House negotiate raising the debt limit. If this limit is not raised in about six months, the nation begins defaulting on some of its financial obligations.
This week, House Speaker Kevin McCarthy met one-on-one with President Biden for the first time this week to discuss a number of issues, including the debt ceiling. The new House majority has made the debt ceiling its opening salvo in what looks to be a highly combative session.
It's at best a hollow, if not downright stupid, fight.
First, the debt ceiling is not for future spending – it's to pay our current obligations, that is, spending decisions approved previously. To not raise the debt ceiling will require default on some payments: perhaps to retirees, to federal employees and contractors, or to foreign investors.
Second, the House GOP caucus does not have a unified plan for spending cuts. McCarthy has already said Medicare and Social Security will not be touched. Most other caucus members will not touch defense spending. Others want to push non-defense, non-Medicare or Social Security spending to 2019 or 2020 levels. Still others want a flat percentage cut across all spending.
However, the Republican proposed budget, which Congressional Republicans say will balance the federal books in 10 years, will not be ready until April.
Meanwhile, Senate Majority Leader Mitch McConnell has already stated that the debt ceiling deal must be brokered between McCarthy and Biden, also noting that "periodically the debt ceiling has to be lifted and it's always a rather contentious effort."
In other words, the Senate GOP is out.
We must balance our budget. Starting this fiscal year. You don't have to convince me. But holding the debt ceiling hostage is not the way to do it. Risking financial default is reckless and politically suicidal.
Think about what would happen if the U.S. defaulted on its existing debt.
All of our financial markets would go haywire were this to happen. This would further undermine the world's largest economy which is already on the brink of recession – and may well be in full-fledged recession by June. The world, already dealing with a major war in Europe and coming out of a pandemic, would further destabilize.
Republicans already botched the midterm election opportunity by failing to win the Senate and just barely squeaking by with a ten-seat majority in the 435-member House of Representatives.
Holding the global economy hostage (when you are the world's largest economy by as large a margin as ours is, our economic issues are global economic issues) over a debt marker that does not affect future spending is bad optics, period. Senate Republicans have already figured this out.
Elections are being won or lost by closer and closer margins nationwide. Economic brinkmanship is not likely to win over large groups of pro-business, moderate or independent voters – the blocs the GOP needs in order to make large inroads in 2024 and beyond.
John Boehner and Paul Ryan left the House of Representatives rather than stay in leadership roles in this increasingly fractured GOP caucus. McCarthy is willing to weather the infighting and make (some highly questionable) deals. In doing so, he has changed the nature of the Speaker's influence in the 118th Congress.
He's not off to a rousing start.
Merritt Hamilton Allen is a PR executive and former Navy officer. She appears regularly as a panelist on NM PBS and is a frequent guest on News Radio KKOB. A Republican, she lives amicably with her Democratic husband north of I-40 where they run two head of dog, and two of cat. She can be reached at news.ind.merritt@gmail.com.