There are many ways, aside from national default or House Republicans’ capitulation, in which Washington’s debt limit fight could end. But they are almost all bad. If Republicans continue to hold hostage the nation’s full faith and credit, the parties will have to spend months figuring out which subpar off-ramp to take.
President Biden should resist, to the extent possible, entrenching the principle that debt limit hostage-taking is a legitimate way for politicians to extract concessions from their political rivals. And Americans should recognize who is forcing the nation to choose between unappetizing resolutions: House Republicans, who are not even pursuing a well-defined policy goal, let alone a rational one.
The worst outcome, of course, would be if House Republicans refuse to lift the debt limit. The market response would be ugly, and the consequences would include more expensive borrowing costs for the U.S. government. In other words, House Republicans, who claim they are holding out to save the American public money, could saddle taxpayers with billions of dollars in new interest costs by failing to increase the debt ceiling on time — and that is only the most predictable consequence of the turmoil that would result.
GOP lawmakers portray their effort as a moral crusade to rein in reckless spending. It’s not. The debt limit, which sits at $31.4 trillion, needs to be raised to pay for all the tax cuts and spending that Congress already approved.
The vast majority of the nation’s $31 trillion debt comes from bipartisan spending increases and deficit-financed tax cuts. Republicans point to Mr. Biden’s $1.9 trillion American Rescue Plan. Meanwhile, Democrats identify President Donald Trump’s $1.9 trillion Tax Cuts and Jobs Act. Both parties omit that they jointly passed $3 trillion in pandemic aid, $800 billion in Great Recession aid, more than $3 trillion in George W. Bush-era tax cuts (and the bipartisan extension of many of them), and trillions in spending on the wars in Iraq and Afghanistan.
Congress has adjusted the debt ceiling more than 100 times since World War II. Raising the debt limit has almost never been front-page news. One of the exceptions occurred in 2011, when Republicans, after years of ignoring the ballooning debt while Mr. Bush was in office, suddenly cared about it when Democrat Barack Obama was president. Republicans pushed the country to near-default in 2011, resulting in a permanent downgrade of the nation’s debt rating and costing taxpayers over $1 billion in higher borrowing costs. Mr. Obama ultimately negotiated with Republicans to raise the debt limit in return for enacting indiscriminate, broad-based spending caps. This is the sorry episode that House Republicans now seek to repeat.
In a rational world, Republicans and Democrats would lift the debt limit now so there is no chance of default. Then Congress and Mr. Biden would launch negotiations to pass a budget that improves the country’s long-term fiscal balance.
Short of this ideal, there are other potential ways out of the impasse — just not many good ones. The notion that an obscure federal law allows the Treasury to mint a trillion-dollar coin is a gimmick that investors and credit agencies, not to mention the American public, would dismiss. If Mr. Biden moved unilaterally to continue issuing federal debt, citing passages in the Constitution seemingly forbidding federal default, he would invite a destabilizing legal crisis.
It’s technically possible that a handful of House Republicans representing swing districts could band with Democrats to force a vote on a clean debt ceiling hike, employing a rarely used maneuver known as a discharge petition.But this would require a lot of precise parliamentary maneuvering over the heads of House GOP leaders, not to mention a surprising degree of bipartisan cooperation. Lawmakers should keep the option open, but relying on it would be dangerous.
Then there is the possibility of some negotiated settlement of spending cuts alongside the debt ceiling increase, which would further legitimize the tactic of holding hostage the nation’s credit for political ends. It is not even clear House Republicans can begin negotiating yet. If House Speaker Kevin McCarthy and his GOP colleagues were serious about reducing the deficit, they would at least agree to a short-term debt ceiling increase that gives Congress and the White House time for real budget talks heading into the fiscal year that begins Oct. 1. So far, they have yet to produce even a list of proposed cuts beyond defunding the Internal Revenue Service, which would likely result in lower tax revenue and wider budget deficits. Mr. McCarthy has also said that Republicans would not seek changes to old-age entitlements such as Medicare, the real drivers of long-term budget instability.
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End of carousel- The Biden administration announces more than $100 million to improve maternal health.
- Wisconsin Republicans back off impeachment threat against justice
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The Department of Health and Human Services announced more than $103 million in funding to address the maternal health crisis. The money will boost access to mental health services, help states train more maternal health providers and bolster nurse midwifery programs. These initiatives are an encouraging step toward tackling major gaps in maternal health and well-being. In August, the Editorial Board wrote about how the United States can address its maternal mortality crisis.
Wisconsin state Assembly Speaker Robin Vos (R) announced Tuesday that Republicans would allow the nonpartisan Legislative Reference Bureau to draw legislative maps, a dramatic reversal after years of opposing such an approach to redistricting. A new liberal majority on the state Supreme Court is expected to throw out the current maps, which make Wisconsin the most gerrymandered state in America. Mr. Vos has been threatening to impeach Justice Janet Protasiewicz, whose election this spring flipped control of the court, in a bid to keep those maps. This led to understandable outcry. Now it seems Mr. Vos is backing off his impeachment threat and his efforts to keep the state gerrymandered. Read our editorial on the Protasiewicz election here.
Prisoners are eating again in Bahrain after the government agreed to let them spend more hours outside and expanded their access to visitors, a welcome development ahead of the crown prince’s visit to Washington this week. Activists say the monthlong hunger strike will resume on Sept. 30 if these promises aren’t kept. Read our editorial calling for the compassionate release of Abdulhadi al-Khawaja, a political prisoner since 2011 who participated in the strike.
A retired teacher in Saudi Arabia, Muhammad al-Ghamdi, has been sentenced to death by the country’s Specialized Criminal Court solely based on his tweets, retweets and YouTube activity, according to Human Rights Watch. The court’s verdict, July 10, was based on two accounts on X, formerly Twitter, which had only a handful of followers. The posts criticized the royal family. The sentence is the latest example of dictatorships imposing harsh sentences on people who use social media for free expression, highlighted in our February editorial.
During a Monday hearing, Judge Tanya S. Chutkan rejected as “far beyond what is necessary” Donald Trump’s demand to postpone until mid-2026 his trial for allegedly obstructing the results of the 2020 election. Instead, she plans to begin the trial on March 4 — the day before Super Tuesday. Six months is more than enough time for defense counsel to prepare. GOP primary voters deserve to know the outcome when choosing their standard-bearer. Read our recent editorial on why these charges against Trump are warranted.
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We have argued that the nation’s long-term fiscal path is bleak and that the parties should impose a mix of tax hikes and benefit adjustments to ensure the government can keep its promises to retirees while continuing to invest in future generations. But that is a separate issue from the debt ceiling; no matter the federal budget outlook, the nation’s full faith and credit should be sacrosanct.
Instead of forcing the country into default, or into a less-bad-but-still-unattractive alternative, House Republicans should simply stand down. And, however this debt ceiling fight ends, there is only one reasonable long-term move: Congress should permanently eliminate lawmakers’ ability to use the debt limit to gain political leverage, either empowering the treasury secretary to raise it, subject to a congressional disapproval vote, or abolishing it entirely.