New York Times: Months Before a Potential Crisis, Both Parties Kick Off a Fiscal Blame Game
Washington, January 19, 2023
WASHINGTON — Though the climactic showdowns over raising the federal debt limit and funding the government are months away, Republicans and Democrats are in a crucial preliminary contest: trying to make sure the other side takes the fall for any dire economic consequences.
Members of both parties are intent on painting the opposition as culpable for the turmoil that would result from a catastrophic default on the debt this summer or a government shutdown springing from a failure to strike a spending agreement by Sept. 30. It is well-trod ground; Republicans and Democrats have been through many similar episodes, with the G.O.P. — driven by an anti-spending fervor that has rendered its members increasingly unwilling to support any funding measure — generally bearing the brunt of the blame for past disruptions.
Fueling the intensifying message fight is the fact that the threats of default and government paralysis seem more pronounced than ever, with the parties digging in and the House Republican majority dominated by far-right conservatives who do not appear deterred in their budget-cutting demands by warnings of fiscal calamity.
The White House and Democrats on Capitol Hill have been working to frame the debate on their terms. Administration officials say Republicans are provoking an unnecessary crisis by insisting on deep spending cuts when a Democrat is occupying the White House, even though the debt ceiling was raised three times during the Trump years without a similar slate of demands from Democrats.
And they believe they can hammer Republicans for forcing a showdown and its attendant consequences, in part because much of the public already views the G.O.P. as uncompromising, a perception that was only underscored by the drawn-out fight this month over electing Representative Kevin McCarthy, Republican of California, as speaker. President Biden noted on Monday that his administration had just registered a $350 billion reduction in the deficit, and he ridiculed Republicans as “fiscally demented” for their approach.
“They don’t quite get it,” the president said to laughter at a breakfast observance of Martin Luther King’s Birthday.
Mr. McCarthy, who was forced to make hefty concessions to the hard right to win his post, has little leeway within his narrow majority to avert a crisis. But he has started early trying to lay the blame at the feet of Democrats instead.
As Republicans vow to extract spending cuts in exchange for an increase in the debt limit, Mr. McCarthy insists it is Mr. Biden and his allies in Congress who are acting cavalierly by refusing in advance to negotiate on such reductions, and they who are risking upheaval if they do not shift their position. The clear inference is that whatever happens will be the fault of Mr. Biden and Senate Democrats.
“Why create a crisis over this?” Mr. McCarthy told reporters this week, suggesting there did not have to be one if only the president and congressional Democrats would cooperate. “We’ve got a Republican House, Democratic Senate, and you’ve got the president there. I think it is arrogant to say we are not going to negotiate about anything.”
Another top Republican said on Thursday that it would be more irresponsible to let a chance for new fiscal controls pass than it would be to risk a default.
“I think it is reckless and wholly irresponsible to just increase the line of credit without adding guardrails and fiscal reforms of all kinds to begin restraining the spending and bending the debt curve,” Representative Jodey C. Arrington, Republican of Texas and the incoming chairman of the Budget Committee, said in an interview.
In Kentucky, Senator Mitch McConnell, the minority leader and a veteran of several debt-limit stare-downs, said the government would not default but predicted that the administration would ultimately have to engage in some type of negotiation with congressional Republicans.
The White House view is that much of the public already sees Republicans as unreasonable after having watched hard-right House Republicans extract concessions from Mr. McCarthy in exchange for his election as speaker. That episode, Democrats note, demonstrated how willing many Republicans are to disrupt the normal functioning of Congress in the service of their ideological vision.
“They are the ones who are taking an active, destructive step, saying, ‘I will force a default unless you accede to my demands,’” said Andrew Bates, a White House spokesman. “If the United States defaulted, millions of jobs would vanish in an instant; retirement funds would take a swan dive.”
The White House hit back fast on Wednesday after Representative Andy Biggs, Republican of Arizona, said on Twitter that the debt limit should not be raised under any circumstances since “Democrats have carelessly spent our taxpayer money and devalued our currency.”
“This president and the American people will not stand for unprecedented economic vandalism,” Mr. Bates said.
Though the debt ceiling was reached on Thursday, the real crisis moment is not expected until sometime this summer, when Treasury exhausts its ability to use so-called extraordinary measures that provide wiggle room for the government to continue borrowing to pay its bills. At that point, the debt ceiling will have to be raised, or the United States will no longer be able to meet all its financial obligations.
As they spar with Republicans, Democrats are heartened by the fact that past fiscal standoffs have ended with the G.O.P. suffering political consequences after they were viewed as the culprits. Even Republicans have conceded that over the years their brand has become “the shutdown party.”
Senator Chuck Schumer, the New York Democrat and majority leader, said Republican would pay a price if they insisted on forging ahead with a dangerous showdown.
“A party that tries to hold up the government and demand something in return is going to lose,” he said.
Mr. Schumer would know. In January 2018, he helped lead Democrats in a confrontation with the Trump administration that resulted in a government shutdown over Democrats’ insistence on protecting undocumented immigrants brought to the United States as children. Democrats hastily backtracked after a brief weekend government closure, when they realized that the public was not siding with them and they could face backlash.
But Republicans seem to be in no mood to relent at this point. Party strategists say that many voters hold the Biden administration responsible for a shaky economy that has shrunk their retirement savings and led to inflation that has hit many of them at the grocery store and the gas pump.
“The American people are waking up to the fact that these fiscal policies — mainly too much spending — that are being advanced in Washington are hitting their pockets,” Mr. Arrington said.
Republicans say they can make the argument that Democrats have overspent — even though Republicans happily joined in during the Trump years — and that the spending spree needs to end. In their view, the occupant of the White House is always going to be ultimately held responsible for the state of the economy in the minds of voters.
“This president has spent more money than any country in the history in the world has spent in just two years,” Representative Jim Banks, an Indiana Republican who recently announced he would run for an open Senate seat, said in an interview on Fox News. “That’s why we have $32 trillion national debt, record high inflation, because they’re printing more money than ever before. If anybody is fiscally demented, it’s Joe Biden.”
But Democrats said Republicans needed to make good on debt they helped run up.
“The debt ceiling is not about adding new spending,” said Senator Ron Wyden, Democrat of Oregon and the chairman of the Finance Committee. “It’s about paying debts that the government owes — debts that were incurred under presidents of both parties.”