2. Debt limit. That showdown looms in June. It’s hard to see how the White House could be the clear winner here. Even if House Republicans blow their rhetoric and push unpopular entitlement cuts but fail to win support, Biden may still eventually have to agree to deep cuts to the domestic discretionary budget (about $750 billion out of a total budget of more than $6 ) trillion), which would not be supported by his party. If, God forbid, the Republicans do drink the crazy juice and force the country to default, the public will blame them, but the economy will suffer, and when the economy suffers, so will the president.
That may be a long shot, but if the White House can get a handful of less extreme House Republicans to agree on a responsible package with all Democrats, then Biden may come out more or less unscathed. Now’s the time to research what a “discharge application” is: knowledge that might help you this summer. Mitch McConnell, by the way, has already signaled his willingness to play on the Senate side.
3. Economy. Inflation remains high but is slowing, so it may not be as much of a major economic concern this year as it was last year. However, there is a new concern: the possibility of a recession in 2023. The latest round of tech layoffs doesn’t seem to bode well. If you read up on the topic, you’ll quickly see that almost everyone is predicting some kind of recession this year. The Conference Board, which surveys Fortune 500 companies, expects a brief but mild recession. Others were less sure, especially about the “short” part. Some saw a 1969-style recession, again not terribly painful, but it did last for almost a year.
