President Joe Biden, 80, who campaigned on compromising with Republicans, sounds more recalcitrant about any horse trading on the continuing budget resolution [CBR], increasing the national debt $1.5 trillion dollars. When it comes to spending billions on the Ukraine War, Biden has no problem, nor does he have any qualms about spending billions more on climate change. Treasury Secretary Janet Yellen, 75, put Congress on notice that she’d run out of cash June 1, forcing the government to default on its obligations. Biden met yesterday with 58-year-old House Speaker Kevin McCarthy (R-Calif.) and other Congressional leaders at the White House to hash out some kind of compromise on future spending before Republican sign onto a $1.5 trillion CBR to allow the government to operate until June 2024. Biden blames Republicans for coercing him into unwanted spending cuts.
Biden forgets what happened in 2019 when 83-year-old House Speaker Nancy Pelosi (D-Calif.) refused to compromise with 76-uyear-old President Donald Trump on his demand for a trillion dollars in border wall funding. Pelosi told Trump he wouldn’t get his border war over “her dead body,” causing the U.S. government to shut down between Dec. 22, 2018 and Jan. 25, 2019, all because Pelosi and Senate Minority Leader Chuck Schumer (D-N.Y.) wanted to stick it to Trump. Now that the tables are turned Biden shows the kind of inflexibility that could send the country into another lockdown. Since 1917, presidents have been forced to go to Congress to get CBRs to keep the Treasury Department funded to pay government obligations, whether to its own citizens or foreign governments. Sen. Mitt Romney (R-Ut.) said Biden should work with McCarthy to get the CBR.
Republicans want Biden to slash future spending on Medicaid’s SNAP [food stamps] benefits, reduce tax incentives for climate change, cut funding to the Internal Revenue Service [IRS] and halt Biden’s plan for student debt relief. Biden insists there’s no room to cut anything and wants the GOP to given him a clean CBR requiring no cuts to any of Biden’s existing spending programs. “I said I’d come back to talk,” Biden said. “There’s one thing I’m ruling out is default. I’m not going to pass a budget that, in fact, caused massive cuts,” telling McCarthy he won’t play ball. Instead of working with Congress like all other presidents, Biden said he could declare Republicans’ demands unconstitutional under the 14th Amendment, something the Supreme Court would likely repeal. Declaring the debt limit unconstitutional, Biden thinks he could instruct Yellen to pay all government obligations.
No Congress or President has ever litigated the provision in the 14th Amendment that it’s always been the responsibility under Article 1 [Congress] and Article 2 [presidency] to work out terms of any CBR. Yellen told ABC News Sunday that there were “simply no good options” other than working with Congress to increase the debt limit. Pelosi had no problem shutting down the government with Trump, playing a dangerous game of chicken with federal budget. Now McCarthy has been blamed by the White House for making demands to cut spending, when Biden demands a clean raise, without any budget cuts. “I don’t want to consider emergency options,” Yellen said, knowing that Biden, not the GOP Congress, refuses to cut any spending. With the federal government running a $1.4 trillion deficit in 2023, there’s more pressure than ever to bring the budget back in balance.
Economists know that if the economy plunges into recession due to a government default, it’s going to dramatically reduce government tax collections in the coming years, exploding the $1.4 trillion deficit. Biden must ask himself whether shutting down the government is worth the costs. Polls show that citizens have changing attitudes about the CBR, knowing what could happen to the government with a default. Most citizens [48%] think that passing a CBR is needed for the government to meet its spending obligations. Most Meidcare and Social Security recipients don’t know that they could temporarily lose benefits until the $1.5 trillion CBR is passed. Moody’s Analytics chief economist Mark Zandi said a government default could cost 7 million jobs, raise the unemployment rate to 8% and tank the stock market by 20%, wiping out $10 trillion in personal financial wealth.
Many economists think the current political nature of CBRs must be changed in the future, where the government’s funding is guaranteed no matter what. Using Congress to hold back a CBR runs against the U.S. economy. “That the U.S. government pays what it owes in a timely war is a bedrock of the U.S. economy and global financial system,” Zandi said. “Lawmakers should put an end to the wrangling over the debt limit and increase it with no strings attached so future generations can enjoy the same benefits,” Zandi said opposed to holding the economy hostage. Biden blamed McCarthy for his obligation to his party’s right wing. But Republicans say the same thing about Biden, that he can’t say no to spending to his left wing base. McCarthy doesn’t think Biden takes spending cuts seriously, refusing to compromise on the budget. As Yellen said, the White House and Congress must do its job.
About the Author
John M. Curtis writes politically neutral commentary analyzing spin in national and global news. He’s editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.
