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The Debt Ceiling Vote a Win for Team McCarthy?

The Debt Ceiling Vote a Win for Team McCarthy?

Now that the months of meaningless public reporting and partisan rancor over the debt ceiling talks have mercifully ended, we can look at the deal and what is in it.  The initial reports myopically focus on picking the winner.  Naturally, the biased leftwing newsies gave the victory to President Biden. FOX News scores the win for Speaker Kevin McCarthy.

The most often provision the Biden fans use as evidence of a win for the President is that the next debt ceiling debate will not occur for two years – long after the 2024 presidential election.  But is that really a win for Biden?  Although the GOP’s debt ceiling bill that passed in the House pushed the next confrontation to March of 2023, House Speaker Kevin McCarthy and the Republicans have as much interest in avoiding an election year debate as does Biden.  

I am betting there was no serious effort to oppose that provision to push off the next round of nonsense.  After all, it is the Republicans who seem to suffer politically in these faux debt ceiling debates.  And even if you give that procedural point to Biden, it is purely a political victory –something that has more to do with the Democrats lust for taxing and spending.  Nothing that especially serves the public interest.

To objectively decide which side scored the victory, you need to look back at the initial positions of the two sides.  For a long time, Biden and the Democrats said that they would only support a “clean bill” – only raising the debt ceiling, period.  Biden emphatically proclaimed that he would not change on that position.  He threw down the gauntlet.  

In claiming victory for Biden, Democrats continued to proffer the claim that Republicans would cut Social Security, Medicare, and veterans’ benefits even though they said from the start that they would not – and there were never any such provisions in the Republican plans or the Bill they passed.  The claims were nothing more than campaign bull poop.

Democrats still claim that Biden saved Social Security and Medicare.  But, from what?  The cuts in those programs that the Republicans never proposed and never wanted?  Democrats claim they stopped Republicans from doing something they never intended to do – and then claimed victory when the Republicans did not do what they never planned to do.  Sorry, that is not a negotiating victory.  

Biden declared the provisions of the Inflation Reduction Act to be off limits for negotiation.  He would not negotiate on those even within the context of not negotiating on anything.  

Biden initially stuck to that position until the GOP passed a Debt Ceiling Bill.  Of course, Biden & Company were hoping – even predicting – that the House Republicans would never agree on a Debt Ceiling Bill.  When they did, Biden had to cave and enter into negotiations.  That was the first big win for McCarthy.

McCarthy said that there will have to be a number of provisions to address excessive government spending.  The key provisions of the GOP Debt Ceiling Bill included:

  1. Keeping most spending at last year’s levels – with the military being a major exception.
  2. Capping spending increases for the next 10 years. A saving of $3.2 trillion, according to the Congressional Budget Office (CBO).
  3. Re-application of unspent Covid money.  (A saving of $30 billion, according to the CBO).
  4. Block President Biden’s attempt to summarily cancel student loans. (A saving of $460 billion, according to the CBO.
  5. It would rescind Biden’s massive influx of money to the Internal Revenue Service (IRS).  (A saving of $120 billion, according to the CBO).
  6. There was a work provision tied to some welfare.

Now that the final agreement has been reached, we can analyze the relative wins or losses from either side – understanding that any successful negotiations have to have some bragging points for both sides.  But in this case, did one side gain more than the other?

First of all, Biden’s initial insistence, that he would not sign anything but a clean bill, has been obliterated.  On that issue, Biden clearly caved.  Score points for McCarthy.

Biden said that the provisions of his misnamed Inflation Reduction Act were non-negotiable.  Apparently, the money for the IRS was negotiable – so on that one, Biden caved.  Score points for McCarthy.

The new debt ceiling deal seems to incorporate most of the provisions of the Republican’s Debt Ceiling Bill – just to a lesser degree.  For sure, they did not get everything they wanted, but they got a lot. Including:

  1. An actual reduction in future spending.
  2. A cap on future increases.
  3. Re-application of unspent Covid funds.
  4. An end to student loan write-offs.
  5. Elimination of the first year of the massive increase in IRS funding (a bite out of the Inflation Reduction Act).
  6. Work provisions for some welfare recipients – excluding parents.

If this list looks a lot like the provisions in the House Debt Ceiling Bill, you are very observant.

In a real sense, anything other than a “clean” debt ceiling bill was a victory for the GOP – and fiscal sanity.  In fact, no previous debt ceiling legislation went so far past a clean bill with so many specific spending restrictions.  This was a historic first.

A better judge of the winner than me is the political partisans.  Despite the home team praise for Biden from the folks on the small screen, the response of the congressional teammates is more telling.  Members of the Democrats’ progressive caucus are complaining loudly.  They do not like the results.  Some have voted against the Bill.  They are also complaining that Biden did not include congressional Democrats in the negotiations.  Neither Senate Majority Leader Chuck Schumer nor House Minority Leader Hakeem Jeffries were invited to sit at the table – or even be in the room.

On the GOP side, there were also complainers and members of the McCarthy House Caucus who voted against the Bill.  But like their Democrat counterparts, they never posed a threat to the compromise Bill’s passage.  Unlike the Democrat complainers – who saw their past gains being whittled away – the GOP “no” votes were complaining that they did not get more concessions from Biden.  In other words, the Democrats were upset because they LOST ground, while the Republicans were upset because they did not gain more ground.  

For sure, Republicans did not get everything they wanted.  By their nature, negotiations require each side to give up something.  But if you look at their starting positions – a “clean bill” versus a litany of specific cost cutting provisions – it is hard to see how Biden has come out a winner.   If all Biden got is a delay in a future debt ceiling debate – and saving Social Security and Medicare from a threat that never existed – it is hard to see a win for team Biden.

As a sidebar, it is worth noting that another loser was political extremism.  The compromise Bill easily passed 314 to 117 – proving that the cliffhanger fearmongering reports by the news media were fake narratives.  It was truly a bipartisan coalition of 149 Republicans and 165 Democrats that crushed the “no” votes on the far left and far right.  As with the earlier GOP Debt Ceiling Bill, McCarthy proved that he could deliver.

On the basis of points scored, I call it a win for the GOP – and the American people.  Not a huge win, but a win.  Hopefully, it will be a small step in a return to fiscal responsibility and “regular order.”  Regardless, it is still a significant shift in the reckless spending trajectory that has characterized Washington for decades.

If there is any positive outcome of all the Draconian predictions during the debate of the Debt Ceiling — and the fearmongering over a hypothetical and unlikely default – it may be that the public has a clearer understanding of how badly dysfunctional the Congress is in handling budgeting, taxing, spending and borrowing.  And that would be a win for the American people.

On the extremes, there are complainers.  Both sides had to surrender something.   Both sides have some things they see as good for their team.  But on balance … on balance … team McCarthy came out ahead.  That is called a win.

So, there ‘tis.

About The Author

Larry Horist

So,there‘tis… The opinions, perspectives and analyses of Larry Horist Larry Horist is a businessman, conservative writer and political strategist with an extensive background in economics and public policy. Clients of his consulting firm have included such conservative icons as Steve Forbes and Milton Friedman. He has served as a consultant to the Nixon White House and travelled the country as a spokesman for President Reagan’s economic reforms. He has testified as an expert witness before numerous legislative bodies, including the U. S. Congress. Horist has lectured and taught courses at numerous colleges and universities, including Harvard, Northwestern, DePaul universities, Hope College and his alma mater, Knox College. He has been a guest on hundreds of public affairs talk shows, and hosted his own program, “Chicago In Sight,” on WIND radio. Horist was a one-time candidate for mayor of Chicago and served as Executive Director of the City Club of Chicago, where he led a successful two-year campaign to save the historic Chicago Theatre from the wrecking ball. An award-winning debater, his insightful and sometimes controversial commentaries appear frequently on the editorial pages of newspapers across the nation. He is praised by readers for his style, substance and sense of humor. According to one reader, Horist is the “new Charles Krauthammer.” He is actively semi-retired in Boca Raton, Florida where he devotes his time to writing. So, there ‘tis is Horist’s signature sign off.

2 Comments

  1. frank stetson

    Does not seem like a win as McCarthy declares chaos on the floor and all legislative work stops.

    “A win for Team McCarthy” screams Larry’s rant! Apparently, this represents one of his longest rants ever showing a dire need to convince those who already agree.

    Winners and losers — Republicans and scorecards. Could they scorecard the nation to determine if the entire nation won and not just their tribe.

    Fiscal conservatives, which are not often politically conservative anymore as political conservatives in office spend like drunken sailors on shore leave, feel deficits and debts are too high, as is spending. I feel revenues are low too. IMO, this debt hostage crisis resulted in a win for both sides, a win for the nation, but clearly not enough to get us where we need to be. The question is: did McCarthy win or did Joe let him win?

    We haven’t taxed the rich fairly since the 1960’s. Today they pay a rate of 37% (before deductions that allow many to pay less than you), and everyone is BITCHING about going to 39.6%. The greatest generation paid a 90% marginal tax rate, with less deductions, and these high rates continued through the 1960’s. That’s McCarthy’s win, he saved the rich, and no one else, 2.6% on top of 37%. Reagan cut it from 70% to 28% — thus ended any tax greatness for the next generation. Win for McCarthy, loss for the nation?
    Biden has already reduced the deficit; a lot. Instinctively Trumpers borrow, spend, and say debt can be renegotiated. A lie. Instinctively Joe knows market and sovereign nation financial collapse, he’s lived close to the edge, he’s seen credit drops, debt ceiling hostage standoffs, great recessions, and more. In his first year, he took Trump’s last 2020 deficit of $3.13T and cut it to $2.77T in 2021. He did that with worse covid numbers than Trump. Also, remember that 2021 is really Trump’s budget so Biden could do only so much, but he did cut the deficit. In 2022, he cut it again, this time to $1.38T which is a lower number not seen since 2010 blowing Trump’s performance out of the water. Now decreasing the rate of increase and claiming success is a false logic Republican-invented mantra but it is a step in the right direction. And that’s what matters most — that our global partners and investors SAW Joe Biden making the right moves in the right direction. However, IMO, it’s still sucks in comparison to any budget from 2010 to 2017 and much more is needed. Even in the time of the free spending Bush JR, our current Biden deficits suck against three out of four Bush deficits, and we know about The Great Recession in the last year of Bush. Even Obama did better than Bush in all eight years of his tenure. We need to be even better Bush and Obama, we need more budget cuts (unless profit is painfully obvious), we need more revenue, from the rich will suffice. We need to save the nation from these Republican tax cut and spend mavericks which is a worse malady than tax and spend.

  2. frank stetson

    IMO, we need a better bottom line including: revenue up, costs down, deficit in the noise or better. It will take over a decade, IMO, to get close.

    Here’s the interesting part in the current debt limit political theatre: the 2023 deficit, in the current Biden budget, was estimated, before the debt ceiling consideration, at $1.5T. That’s flat or slightly up from 2022 which is odd for a guy who has consistently been bringing deficits down. Why would he change course in his third year?

    Biden has reduced the deficit for two years running, and suddenly in 2023, he decides to flat line, not reduce, the deficit? Weird science or artful dodger of the deal?

    Biden has fought debt-ceiling-kidnappers before. He has given in to debt ceiling hostage takers before. Under Obama, he negotiated a $2.1T cost cut over ten years. In the process, we lost our credit rating, entered sequestration for a while, and even made cuts to the mandatory Medicare spending. Biden knows first-hand the political dynamics of budgets held hostage. How Americans can support either way at times based on the perceived need or the tragedy of taking hostages. And apparently, with age, he’s gotten much stronger at results, this time getting McCarthy to accept two years of cuts instead of the ten years he signed off on before.

    In this one, McCarthy, demanded a flat budget, ten years, and got two years with a 1% increase to defense.
    He wanted to raise the debt ceiling for 1 year, will have to wait 2 years, or after the election.

    He wanted $4.5T in cuts over 10 years, he got a spending freeze, sort of, not quite, but for only two years, with an increase on the largest discretionary budget item, defense.

    He wanted “retrieving unspent pandemic-related funds, eliminating Biden’s student loan forgiveness plan and cutting the new funds earmarked for expanding the Internal Revenue Service.” He got all, just not as much as wanted in that the IRS plan was cut 25%.
    Think about it: Biden knows the student loan stuff is a loser, either in court or in public. Now it’s McCarthy’s issue as he blocked it. Everyone wants to claw back the covid funds, no one cares. And the IRS at 80% of the budget which targets rich cheats, will probably be self-funding based on success. Catch crooks and prosper, you will get more budget. And 80% of a huge budget is still huge.

    Kevin got to raise the age limit to 55 from 50 for forcing work for welfare. He had wanted more. And who really cares that much anyway, not many actually affected.

    McCarthy wanted to repeal green energy tax credits and did not get it. Now Joe has the largest environmental package passed since the 70’s. And he wanted to expedite new oil drilling projects, which he got. As long as they are safe, let’s go fast, why not? Also, as a bluebird, Biden talked McCarthy into letting Manchin get a controversial gas pipeline. Joe fulfilled his Manchin IOU letting McCarthy hold the bag with environmentalists.

    From Joe’s standpoint, you might say that the infrastructure bill and IRA bill are intact with only the IRS agent pruning as the budget went from $80M to $59M. A deep cut leaving 80% in new budget to attack to problem of rich tax cheats. If 30,000 agents turn into 22,000 agents, Biden will not cry. Especially since he can still claim he is still going after rich cheats as well as passing the largest environmental act into law since the 1970’s, the largest infrastructure act in decades. Pretty good election year stuff.
    Joe can say Medicare not touched, SS not touched, Defense up higher thar Republicans asked for, and if done correctly, the drilling expedite will be just that, which is a good thing if environmental controls are not shortchanged in the process. And Manchin will love Joe for a while.

    If you believe that Joe would have normally offered a deficit reduction as he has in every year, one might conclude that he ended off better than intended, and that he intended every last bit of this.

    Now, that aside, one might also conclude Joe structured this as a win-win, where both look OK to their parties, can claim the win in the checkbox, and can blame the other for any shortfalls like Biden paying off the Manchin IOU though McCarthy’s incredibly tough negotiation skills…. To that point, I say McCarthy hopefully got enough to claim Larry’s win. That’s great for the nation. But don’t believe that Joe lost. He may have planned it all, may have gotten more than he expected, like the Manchin weirdness.

    What Biden did is the right thing, the right way, and will continue to lower the nation’s deficit showing our investors that we can exercise financial aptitude upon occasion. McCarthy did well too, but surely neither rolled over the other: it was a win-win and that’s a win for the nation. The proof in the pudding is infrastructure/IRA/etc. results for Joe and for Kevin, if he can stay alive in the Freedom Caucus after his “win” that made them shut down the floor of Congress until next week.

    I still say IT’S NOT ENOUGH, but that’s another tome for another time. We need the additional revenues from the rich equal to what The Greatest Generation did to pay down their war. It’s times we pay down our war. Our debt. Our children’s future. It may be decades to fix this, but we need to move forward as Obama and Biden tried, not backwards like Bush and Trump, especially Trump.

    But, the bottom line:
    Kevin is a winner
    but Biden wins too
    and it sure looks like this is Biden orchestrated from the time he put his budget in until the debt ceiling was lifted, and then some. Manchin agrees……maybe