Going for broke: How the debt ceiling fight exposed Republican bankruptcy

June 5, 2023 4:30 am

The U.S. Capitol. (Drew Angerer/Getty Images)

The party of Lincoln has been reduced to a bunch of grumpy old haters who can’t do math. That’s the lesson of the debt ceiling fight.

After pushing the United States to the brink of a disastrous, economy-wrecking default, the GOP pulled back and accepted a compromise that leaves most of President Joe Biden’s key priorities in place.

Making older food stamp recipients meet new work requirements, cutting back the IRS’s ability to collect money from wealthy tax cheats, and fast-tracking a dirty pipeline through Appalachia turned out to be the price of a deal that landed a long, long way from the initial House Republican grandstanding, with demands for massive cuts across the entire federal government in exchange for avoiding default.

Of course, Republicans who voted for the final deal are declaring victory, even though it earned fewer Republican votes in both the House and Senate than votes from Democrats.

GOP talk about putting America on a responsible fiscal path is pretty rich, coming from supporters of former President Donald Trump, who oversaw the third-biggest deficit increase of any president in U.S. history.

“One of President Donald Trump’s lesser known but profoundly damaging legacies will be the explosive rise in the national debt that occurred on his watch,” Allan Sloan and Cezry Podkiul wrote in a 2021 news analysis piece for ProPublica. “The financial burden that he’s inflicted on our government will wreak havoc for decades, saddling our kids and grandkids with debt.”

With his tax breaks for the rich, Trump and his GOP enablers  increased the national debt by $7.8 trillion, running up an annual deficit that, relative to the size of the economy, was larger than that of any other president except for Abraham Lincoln and George W. Bush — both of whom, unlike Trump, incurred big bills fighting long, costly wars.

As Josh Marshall wrote in Talking Points Memo, for all their nattering about fiscal conservatism, Republicans don’t really care about budgetary matters very much. As long as they can spin the whole thing as a victory, they aren’t that interested in the details. Now they can go back to their true passions: bullying transgender kids, banning textbooks on “critical race theory,” and, of course, taking away abortion rights.

All that mathy, budgety stuff is boring. The only fiscal matters that really juice up GOP leaders are cutting taxes and inflicting economic hardship on the already vulnerable (unless they’re not born). Hence the food stamps work requirement (which Biden paired with a benefits expansion that eats up all the cost savings, according to the Congressional Budget Office. So Republicans, it turns out, didn’t save any money by making old people work for food).

Young people are also GOP targets. While Washington was consumed with the debt limit deal, the Senate pushed through a bill to cancel Biden’s student debt cancellation plan — the same program Republicans failed to strip out in the debt deal, and which is currently on ice as conservatives challenge it in court.

In typical us-versus-them fashion, Republicans deride help for the 1-in-5 Americans with student loan debt because, as Tiffany puts it, debt relief “forces 87% of Americans without federal student loan debt to pay for those that do.”

Never mind that student loan debt, which averages $58,238 per indebted household, is a drag on the whole economy, causing people to postpone major purchases like a first home or car, and denies borrowers, who face unfair terms and unscrupulous lenders, a fair shot at the middle class.

“Somebody is going to have to explain to me why it’s OK to figure $300,000 in PPP loans taken and forgiven for Assembly Speaker Robin Vos is great for the economy, but forgiving $10,000 of student debt for a struggling server or gig economy worker is destructive to the economy,” says Scot Ross, former director of One Wisconsin Now, who spent years working to raise awareness of student debt as a major issue for voters of all ages across the country.

It’s basic economics that loan forgiveness for people who are strapped, unlike tax breaks for corporations and the very rich, injects money directly into the economy. People who need money spend it when they get it, stimulating the whole economic system, instead of stashing it in offshore accounts.

But that’s the kind of lesson that gets a big yawn from the Freedom Caucus members dozing in their MAGA caps at the back of econ class.

If they really cared at all about the national debt and deficits they wouldn’t insist on keeping the massive 2017 tax cuts for the very wealthy that supercharged the debt. Their plan to cut their way out of the deficit without bringing in any more money in taxes was so extreme, as Pocan put it, they were embarrassed to write it into an actual bill. Instead they threw themselves on the mercy of Biden and Congressional Democrats, who helped come up with a face-saving deal and gave them the votes to pass it so they could lift the debt limit, avoid crashing the economy, and pretend they stuck it to the man.

In the end they needed the smart kids they picked on to do their homework for them.

It’s a little pathetic, not to mention shortsighted, even as a political strategy.

“Considering what Republicans have done with abortion and transphobia, they’re willing to offend the remaining voters who may exist under the age of 35 who aren’t turned off by those two issues,” says Ross of the GOP attacks on student debtors.

If he were a Democrat, he says, he’d send out a monthly reminder to everyone in a Republican district still paying exorbitant interest on their student loans, letting them know the bill is coming “courtesy of your member of Congress.”



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Ruth Conniff
Ruth Conniff

Ruth Conniff is Editor-in-chief of the Wisconsin Examiner. She formerly served as Editor-in-chief of The Progressive Magazine, and opened the Progressive’s office in Washington, DC, during the Clinton Administration, where she made her debut as a political pundit on CNN’s Capital Gang Sunday and Fox News. She moved to Oaxaca, Mexico, for a year in 2017, where she covered U.S./Mexico relations, the migrant caravan, and Mexico’s efforts to grapple with Donald Trump. Conniff is a frequent guest on All in with Chris Hayes on MSNBC and has appeared on Good Morning America, Democracy Now!, Wisconsin Public Radio, and other radio and television programs. In 2011, she did award-winning coverage of the uprising against Governor Scott Walker in Wisconsin. She has also written for The Nation, The New York Times, The Washington Post, and The Los Angeles Times, among other publications. Conniff graduated from Yale University in 1990, where she ran track and edited the campus magazine The New Journal.