Debt Ceiling

2005-2023 | 18 years

This episode has a lot of moving parts, with Vinick trying to choose a running mate, the Democrats still trying to get to a presidential nominee, debate about the role of religion in politics, and President Bartlet and Vinick trying to get a deal on the debt ceiling. On Saturday, President Biden and Speaker McCarthy came to an agreement to raise the Federal Debt Ceiling. The deal still needs to be approved by both the House and the Senate. In fact, tonight is when the House is scheduled to vote to raise the debt ceiling.

The agreement to pass the debt ceiling has many parts. The first is that spending will be kept flat in 2024 and capped at a 1% raise in 2025-although this doesn’t seem like a cut, it will be outpaced by inflation, so programs will be forced to make cuts. However, military spending would remain at about 3% for 2024. Additionally, work requirements for Americans on the Supplemental Nutrition Assistance Program(food stamps) will change, as by 2025 able-bodied adults ages 18-54 will be required to work to receive these benefits. This expires in 2030 bringing the maximum age for work requirements down to its current range of 18-49. Also, about $30 Billion in unspent covid relief money will be rescinded. And congress will be cutting up to $21.4 billion out of $80 billion that they previously allocated to the IRS to modernize their technology and increase tax enforcement, something which experts say would in fact increase the deficit by $900 million because less enforcement means the treasury is acquiring less money. President Biden also agreed to pause student loan payments until the end of August. But Medical care for Veterans will be fully funded at the levels laid out in President Biden’s proposed 2024 budget blueprints, including a fund dedicated to veterans exposed to toxic substances or environmental hazards. Lastly, a “single lead agency” will be created to develop and schedule environmental reviews. Requirements for the reviews will be simplified, and while agencies currently take an average of 4½ years, they will now be given only one or two years to complete these reviews. As part of the deal, the debt limit will also be suspended until January 2025, after the 2024 election cycle.

In the episode, CJ, Charlie, Toby, and Annabeth talk about how the party leadership likes to schedule the vote at the last minute so it is too dangerous for Congress to add anything to it or vote against it, a strategy that it seems President Biden and Speaker McCarthy took, leaving just enough time for the bill to get through. The debt ceiling is often misunderstood by the general public. It is not Congress raising the amount that the country is allowed to spend, but rather Congress allowing the federal government to pay off the debt we have already incurred. This is what makes using the debt ceiling as a bargaining tool so dangerous. Taking the debt ceiling hostage is a fairly recent phenomenon. The first debt ceiling fight was in 1995 under President Clinton, in 2011 and 2013 under President Obama, in 2021 under President Biden, and now again in 2023. Notably, in each of these crises it was Republicans using the debt ceiling as a negotiation tool against a Democratic President. This tactic really took off in modern politics after the creation of the Tea Party. I just finished watching another one of Sorkin’s series, The Newsroom, and the character Sloan Sabbith (an wickedly smart economics expert) explains why this tactic is so dangerous, noting “just the debate, just the doubt, just the possibility that the House Majority might commit the most self-inflicted damage to the country since the secession of the South, has caused billions in value to disappear.”

Congressional Republicans argue that using the debt ceiling as a bargaining chip is necessary to be able to decrease federal spending so we stop overspending and going into debt in the first place. But Democrats argue that they shouldn’t be playing games with something as important as the debt ceiling. There is also increasing fear as far-right extremism begins to grow and certain members of Congress seem to truly not care about the damage that would be inflicted by raising the debt ceiling as much as their own political agendas.