President Joe Biden’s proposed budget for the federal fiscal year that starts on Oct. 1 would spend $6.8 trillion off revenues of only $5 trillion in taxes collected. The imbalance, a $1.8 trillion deficit, would get added to the national debt of $31.4 trillion that has been building since 1789. That’s how it’s always worked and the full faith and credit of the United States allows Congress to borrow to keep the federal government running.
The problem is that since Jan. 19 of this year, the U.S. Treasury has been at the legal limit of debt it can issue. The $31.4 trillion was capped 13 months earlier, on Dec. 16, 2021, when the limit was raised by $2.5 trillion. Normally, the Congress would agree to boost the maximum allowable borrowing, something it has always done since the debt ceiling was first implemented in 1917.
But this Congress, and we mean a hard-right chunk of House Republicans under Speaker Kevin McCarthy, refuses to raise the ceiling unless they get Biden and the Democrats to cut some of their favored programs, a naked political demand thrown into a situation that should be above partisanship.
While the ceiling has already been hit, the Treasury can do some maneuvering with spending for a few months, but by summer those stalling options will be exhausted and the ceiling will have to be increased.
At the same, next year’s budget will be being fought over, as the Constitution requires that “All Bills for raising Revenue shall originate in the House of Representatives.” Social Security, Medicare, defense will all be debated, along with Biden’s plans that he laid out in his budget speech last week. That he presented his budget in Philly in the Electoral College battleground state of Pennsylvania means that the 2024 presidential campaign is gearing up, with Biden preparing to take on Donald Trump and whoever challenges Trump in the GOP.
What can’t get lost in the budget struggle and the campaign is the debt ceiling. McCarthy’s duty is clear. He must carry it out.
