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There's a looming crisis that could soon pummel the U.S. economy, and the consequences could affect all of us.
House Republicans have confirmed they are willing to push the economy off a cliff for political leverage. In plain terms, they are refusing to raise the debt ceiling — which would basically just pay for bills they and the Trump White House largely racked up — unless Democrats and the Biden White House agree to deep cuts to our future budget.
Simply put, they’re taking America’s economy hostage, saying that after a four-year Christmas spending spree under Trump, they’ll stop paying the nation’s credit card bill unless Biden agrees to play Scrooge in future Christmases.
It’s a dangerous time to be playing these kinds of political games because a default or even the threat of one could trigger global panic.
And what do the House Ebenezers want to cut? You might think they would look to defense spending since so many of them are all up in arms about funding Ukraine and the “woke” military. But no, that’s the untouchable third rail.
Instead, they want to kill large chunks of Biden’s Inflation Reduction Act, which means spending on the environment and transportation — bridges, tunnels, electric cars — that sort of thing. And guess who they think should bear the brunt of these cuts? People experiencing poverty, of course, since the GOP's bill targets programs for them.
The House Republican bill that some in the media credited as a “McCarthy win” would add work requirements to Medicaid and expand current work requirements to the food stamp program and the Temporary Assistance for Needy Families program.
The work requirements would cause some families to lose monthly food benefits or lose health coverage if the person receiving Medicaid were to get sick and become unable to work. That would leave our most vulnerable with zero income or government support.
Republicans have a history of messing with the debt ceiling under Democratic presidents to score political points.
The financial services company Moody’s called the Republican proposal a stinker because it would effectively lay off 780,000 Americans, which would also slow economic growth.
It’s a dangerous time to be playing these kinds of political games because a default or even the threat of one could trigger global panic at a time when our economy is fragile.
House Republicans claim they’re doing this in the name of fiscal responsibility, but then you might ask why they raised the debt ceiling three times under Trump with no pre-conditions while spending continued to soar. Those economic changes were tax cuts to the wealthy which added roughly $2.3 trillion to the debt.
The only difference this time is that a Democrat is president, and Republicans have a history of messing with the debt ceiling under Democratic presidents to score political points.
Bottom line: The House bill is going nowhere in the Senate because Biden, congressional Democrats and most analysts agree that the full faith and credit of the U.S. government is not up for negotiation. It is now up to Kevin McCarthy to come up with an acceptable off-ramp fast. The question is, how can he — and the so-called moderate Republicans — do that when they only answer to MAGA extremists?
This is an excerpt from Monday’s episode of “The ReidOut.” It has been slightly edited for length and clarity.