Biden and McCarthy must prevent default- McConnell
2023.01.26 10:16
Biden and McCarthy must prevent default- McConnell
By Tiffany Smith
Budrigannews.com – The public discussion regarding the US debt ceiling has been dominated by ultraconservatives in the House; however, Speaker Kevin McCarthy cannot afford to ignore GOP centrists if the nation is to avoid a catastrophic payments default later this year.
In order to avoid the massive cuts to federal spending that some GOP members have demanded, which would affect popular programs like Social Security and Medicare, Republican moderates are looking for bipartisan solutions to the debt-ceiling dilemma.
Indexing discretionary spending to inflation is one of their ideas, which are more likely to be adopted by Democrats in the Senate and the White House than by conservatives. tying the debt limit to the GDP of the nation; and generalized, modest reductions in expenditures. Entitlement programs are not included in discretionary spending.
If they are successful in reaching a solution that can be approved by both chambers, both parties are also working on long-term solutions for Social Security, which could have significant repercussions in the dispute over the debt limit.
President Joe Biden and McCarthy, according to Senate Republican Leader Mitch McConnell, must prevent a debt default. In the House, where Republicans hold a slim majority, any debt ceiling bill that could garner the required 60 votes in the Democratic-led chamber would almost certainly fail to pass.
As a result, the House speaker, who was elected after making concessions to conservatives, faces the challenge of uniting his divided party.
During a press conference on Wednesday, Minnesota Majority Whip Tom Emmer stated, “It’s been made clear over the past week that House Republicans are going to have to be proactive and take the lead on debt-ceiling negotiations.”
Nebraska’s moderate Republican representative Don Bacon wants to link inflation to increases in discretionary spending. To the dismay of liberal Democrats and fiscal conservatives, defense spending typically rises much faster than consumer prices.
Bacon stated to “Democrats and Republicans,” “It would be a compromise, I believe, that you can get many people on board.” because you are reducing spending rather than making drastic cuts. You are, in the long run, steering the ship in the right direction because it is inflation-free.
Bacon wants both parties to address Medicare and Social Security through a joint committee, stressing that neither party can solve the problem on its own.
Republican Representative Brian Fitzpatrick stated that he and Democratic Representative Josh Gottheimer are working on a plan to eliminate a fixed debt ceiling and instead establish a limit based on a percentage of the nation’s economic output.
The bipartisan Problem Solvers Caucus, which is meeting Wednesday night to discuss the debt ceiling, is headed by these two men. Gottheimer declined to comment, and Fitzpatrick did not provide any specifics, including the actual debt-to-GDP ratio that would set the ceiling.
Gottheimer stated:
“We’re meeting and working.” We have no choice but to complete this, so I’m optimistic that we will have to do so.
One issue with the concept was brought up by North Dakota Republican Senator Kevin Cramer: The limit may be exceeded by existing appropriations in the event of a recession.
As of July, the United States’ total debt was approximately 120 percent of the country’s GDP. This figure has steadily increased over the past two decades and peaked at the beginning of the pandemic, when economic growth declined.
Cramer stated:
“We’ve been in a high inflation, high productivity kind of boom.” However, Cramer cautioned, “All of a sudden, you hit a recession and you go backwards, which could happen.”
According to Representative Nancy Mace, a moderate Republican from South Carolina, a proposal for a debt-to-GDP ratio would need to also change how the government spends money. That’s going to be a problem if that doesn’t include budget reform, she told reporters on Wednesday.
Mace intends to reintroduce the Penny Plan, an original concept of her own. Without affecting Social Security, Medicare, or Medicaid, the plan would reduce the amount of money the federal government spends in the future by a small percentage.
According to Mace, the budget could be balanced in close to a decade, which is twice as long as the timeframe she suggested last year.
Mace stated, “Nobody wants to cut Social Security.” Therefore, that is out of the question. Instead, we are looking at ways to reduce spending elsewhere, whether it be mandatory or discretionary; there is waste everywhere.
Strategies for dealing with trust funds like Medicare and Social Security, which, according to some estimates, may run out of money within five and twelve years, respectively, are just beginning to be discussed among both parties in bipartisan meetings. Cramer has proposed raising the eligibility age for Social Security.
While Senators Mitt Romney has a bill that is supported by West Virginia Democrat Joe Manchin to establish commissions to propose solutions for Social Security and other trust funds, Senators Bill Cassidy and Angus King are working on a bipartisan compromise on Social Security that King insists is unrelated to the debt limit.
The “rescue committees” Romney proposes would have 12 members and be tasked with drafting legislation to extend each trust fund’s solvency. He claimed that neither current nor future retirees’ benefits would be affected by the legislation.
Romney told reporters on Tuesday, “We want to make sure we don’t ever cut Social Security benefits.” He warned that if the trust fund went bankrupt, benefits would be cut by 25% automatically. This bill does exactly what we need to ensure that we do not reach that point.
