President Joe Biden’s 2023 State of the Union address was a mixed bag for congressional Republicans.
On the one hand, he wasn’t shy about challenging them (nor were they reluctant to push back at him.) On the other, he touted bipartisan legislation like the infrastructure package and legislation to help veterans exposed to burn pits get care.
One consistent theme we hope Idaho’s congressional delegation heard in Biden’s address was an invitation to the incoming Republican House majority to participate in bipartisan government — something that once worked very well for America.
There’s room for significant policy disagreement within bipartisan government.
Biden floated several ideas that have no shot with a Republican majority in the House: quadrupling the tax on corporate stock buybacks, increasing taxes on the wealthy, banning assault weapons, and so on.
There’s room for Republican posturing, too — passing bills you know don’t have a shot in the Senate or to get past a veto.
As long as the actual work of governing gets done.
That will be tested immediately. One of the most important pieces of that work of governing is already past due: raising the debt ceiling.
Biden was clear he would not negotiate about it. And he’s right to take that position.
The debt ceiling is a problem that begins and ends with Congress. Congress passes spending bills. Congress levies taxes. The deficit is the difference between spending and tax revenue, so Congress fully controls the debt.
It is sheer lunacy that the debt ceiling exists at all. How would you speak to a business owner who creates a rule that says they will stop paying their bills if their debt goes over $100,000?
“The fact that you made decisions that put you in debt doesn’t relieve you of your obligation to pay your bills.”
Now imagine that the business owner gets close to breaching that self-imposed limit, and they try to use it as a bargaining chip to extract concessions. You could only laugh at someone that ridiculous, and wonder how they wound up owning a business.
That’s what the part of the House Republican Caucus that wants to play hardball with the debt ceiling wants to do.
If the Republicans fall in line behind that strategy, it’s hard to overstate the danger.
And as with a business owner who decides not to pay his bills for a month, defaulting on the debt would be catastrophic. U.S. Treasuries are the world’s safe asset, the benchmark against which every other asset is measured. Defaulting on the debt means failing to pay them, along with active duty military members and Social Security checks.
The last standoff over the debt ceiling during the Obama administration led the nation’s credit rating to be downgraded — not because any payments were missed, but because there was a sufficient loss of confidence in the competence of Congress in financial markets.
So give up on the debt ceiling as a bargaining chip. Don’t get anywhere near it.
Raise the debt ceiling immediately, and then negotiate about policy. There’s lots of room to do so.
