Clarity on the Debt Ceiling

David Ball

The opinions expressed in this post are strictly those of the author and do not necessarily reflect opinions or positions held by Indivisible Northampton-Swing Left Western MA.

Kevin McCarthy won the votes to become Speaker of the House by promising far-right Republican representatives that he would not agree to raising the debt ceiling without demanding cuts in federal spending. This would hold the government hostage until they got what they wanted.

This mixes together two separate things: the debt ceiling, which must be lifted to enable the government to pay its past debts, and the budget, which is a plan for spending money in the future. Raising the debt ceiling has nothing to do with government spending: it is about protecting the country’s financial health. Refusing to lift it would mean the government could not pay federal workers, veterans, households that depend on Social Security, etc., because it could no longer borrow the funds to do so.

Borrowing is essential to a working economy. The credit rating of US would be lowered, making future borrowing more expensive. That’s why the debt ceiling has been raised automatically in the past—three times under Trump, when the federal debt rose dramatically. Social Security and Medicare are the biggest items in the federal budget, by far. McCarthy
knows they’re popular, so he speaks of cutting “wasteful government spending.” Don’t be fooled: there’s not much else to cut except Defense, and no one in Congress wants to do that.

It’s like a standoff in a hostage movie. Or a scene showing how the protection racket works: the GOP is essentially saying “Nice country you got here. Be a shame if something happened to it. Now, you wanna talk Social Security and Medicare?”