Commentary: Republicans walk out of debt-ceiling negotiations
San José, CA – On Friday, May 19, Republicans walked out of debt ceiling negotiations with the Democrats. Presidential candidate Donald Trump followed with a no-compromise stance, saying the Republicans should hold out for “everything that they want.” More than a quarter of Democrat Senators who are opposed to the Republican cuts called on President Biden to overrule the debt ceiling using the 14th Amendment to the Constitution, which guarantees that the national debt shall be paid.
The crisis over the debt ceiling is a result of growing polarization in the United States. Up until the 1995, Congress regularly raised the debt ceiling so that the U.S. government could carry out its spending commitments passed by Congress. But since that time, Republicans in Congress have weaponized the debt ceiling every time there was a Democratic president. By refusing to raise the debt ceiling and forcing a possible reneging of U.S. spending obligations, Republicans caused a partial government shutdown in 1995-96 under President Clinton, forced major cuts in government spending in 2011 under President Obama, and are now demanding more spending cuts under President Biden. What really concerns the Republicans is social spending that benefits the poor, not the deficit or debt. Under President Trump, Republicans raised the debt ceiling three times.
What the Republicans are demanding is the rolling back of federal Government spending. They want to spare military spending, Social Security, and Medicare (health insurance for seniors and disabled). However, they want to eliminate student loan relief, put work requirements for Medicaid (health insurance for low-income households), SNAP (Supplemental Nutrition Assistance Program, commonly known as food stamps), cutting funds to the IRS (which would make it easier to cheat on taxes and reduce tax revenues, making the deficit bigger), and cutting green energy subsidies passed under the recent Inflation Reduction Act.
Work requirements for Medicaid would cut of health insurance for an estimated 1.7 million low income individuals. Cutting off Medicaid would worsen the health care inequality in this country. The proposed Republican cuts would end food stamps for about 275,000 people. Already there is a hunger crisis in the United States, and cutting food stamps would just make it worse.
While the Biden administration had started by saying that they were not going to negotiate, they have given ground and were negotiating. Biden has said that he would accept some, but not all of the cuts. One problem with compromising is that the debt ceiling would only be raised for nine months, and then another round of Republican and right-wing demands would be put on the table. The Republicans say that their goal is to balance the budget, without touching the military, social security, or Medicare. But this would require a whopping 80% cut in all other programs, hitting programs that help working-class and poor Americans the hardest.
Unless Biden can take special measures, like invoking the 14th Amendment, or gives in to the Republicans, there is a chance that the federal government would run out of money as soon as June 1. In the last debt crisis in 2011, the Obama administration was ready to prioritize payments for U.S. government bonds to avoid a default. The Biden administration is likely to do the same, which would mean delaying other payments, especially Social Security, Medicare, and Medicaid, which are the biggest non-military spending programs. These would mean putting the needs of Wall Street over seniors and low-income families.