How Are the Debt Limit Talks Going?

Debt limit talks continue in Washington, D.C. The U.S. House of Representatives passed its bill titled Limit, Save, Grow Act, but the U.S. Senate has not yet passed a bill. President Joe Biden refused for more than 90 days to negotiate with Speaker of the House Kevin McCarthy. Now he is negotiating but is many days late and wants to spend too much money. McCarthy remained positive and called the debt conversation “productive.” However, the two sides have not yet reached an agreement about increasing the federal debt limit.

One reason that the Senate did not pass a bill is that Senate leaders did not think that McCarthy could unite all the factions of the Republicans in the House. The Republicans hold a narrow majority in the House, and many people did not think that he could obtain 218 votes to pass the debt limit bill. However, they were wrong.

The House passed the Limit, Save, Grow Act to the disbelief of many people. In the words of David Ditch, “The bill would reduce deficits by trillions of dollars and cut red tape that stands in the way of hundreds of thousands of jobs.” 

McCarthy worked hard to bring bill with some fiscal sanity to the negotiation table, and Americans are viewing him in better light. “There is a clear upward polling trend this year in both his national approval and net favorable ratings.” However, there is a great deal of pressure on McCarthy and other Republican members of Congress back down and give in to the Democrat demand to pass a clean debt limit bill. So far, McCarthy and Republicans have stood strong, while Democrats have resorted to their usual tool – dishonesty. Ditch listed “seven false, misleading, or nonsensical claims” that have not caused any caving by the Republicans.

Claim No. 1: Republicans won’t negotiate and will make America hit the debt ceiling. This is the most common rhetorical tactic from Biden, essentially contending that if it weren’t for Republicans, there wouldn’t be a problem. However, that ignores the fact that the House passed the Limit, Save, Grow Act, which would immediately increase the debt limit, but with accompanying restrictions on spending….

Claim No. 2: Biden can raise the debt ceiling unilaterally because of a provision of the 14^th Amendment.

In what has become a recurring theme, the Biden administration once again claims to have the unilateral authority to sidestep Congress and do as it pleases. We’ve seen this dictatorial approach on COVID-19-era evictions and student loans, and now, Biden has embraced the notion that the president can increase the debt ceiling without legislative authority.

At issue is the 14^th Amendment to the Constitution. Section 4 states that “the validity of the public debt of the United States, authorized by law … shall not be questioned.” That was clearly meant to ensure that if the federal government issues debt, a future president or act of Congress cannot render it void.

Since Article 1, Section 8 of the Constitution gives Congress alone the power to authorize spending, levy taxes and fees, or issue additional debt, the idea that the 14^th Amendment provides the president with unstated powers to ignore Congress on this issue is ludicrous….

Claim No. 3: Republicans gave President Donald Trump “clean” debt limit increases and should do the same for Biden.

What Democrats want is a debt limit increase without any other policy provisions included in the legislation, or a “clean” increase. They clam that that’s how Republicans handled the issue during the Trump administration.

However, all three of the debt limit increases under Trump were directly linked to spending actions. While these deals were heavily flawed, they were still subject to bipartisan negotiations….

Claim No. 4: We should save $1 trillion by freezing 2024 appropriated defense and nondefense spending at 2023 levels.

An offer that Democrats supposedly made (but Republicans rejected) would have kept so-called discretionary spending at fiscal year 2023 levels into 2024, rather than the typical practice of increasing spending. The claim is that this would cause a ripple effect on future years and save $1 trillion.

However, there are two major flaws with that line of thinking….

Claim No. 5: Biden reduced deficits by $1.7 trillion.

Biden has made this claim so often that The Washington Post issued a “bottomless Pinocchio” rating.

The deficit shrank as a result of pandemic-related spending coming to an end. In contrast, Biden’s choices have increased short- and near-term deficits by more than $6 trillion, which is especially bad at a time of high inflation and rising interest rates.

Claim No. 6: We should focus on raising taxes.

There are several variations on this assertion, including an offer from the Biden administration that focuses on trillions in tax hikes and that the 2017 tax cuts were a handout to the wealthy….

We have a spending problem, not a revenue problem. Unless elected officials get spending under control, the middle class will ultimately pay the price….

Claim No. 7: The Limit, Save, Grow Act directly cuts spending on veterans, border security, and more.

It can be hard to tell whether Biden has forgotten how federal budgeting works or is just pretending not to know. Either way, there’s no excuse for claiming that enacting a lower spending cap would immediately reduce spending on veterans, border security, rail safety, and seemingly everything else under the sun.

The way budgeting actually wors is that Congress must fit its appropriated spending within an overall limit, and it can prioritize that spending. That means that if the limit is lower, it can focus those cuts on low-priority areas, such as earmark boondoggles and programs that fund the activist Left.

Conclusion

The next few weeks will likely see a flurry of backroom discussions, partisan bickering, and more dubious claims like the ones above.

What matters most is that Republicans, led by McCarthy, must not buckle under pressure from Democrats and their allies in the mainstream media.

America’s fiscal situation is dire, so any debt limit increase must come with strong budgetary reforms.