washington – The top priority of the past week and coming months has been raising the nation’s $31.4 trillion debt ceiling to allow the federal government to borrow more and pay its bills.
U.S. House Majority Leader Steve Scalise, R-Jefferson, likened the situation to a maxed-out credit card, with consumers seeking higher limits rather than cutting back on spending while paying down debt.
“It’s the ability to print more money,” he said in a recent interview, a point he has repeated in numerous interviews with the media. “When you hit the debt ceiling, it comes due. The only way to fix that is to rein in spending or raise the debt ceiling, or a combination of both.”
U.S. Treasury Secretary Janet Yelling last week announced a series of technical measures to avoid a default sometime this summer. Congress and the White House must raise the debt ceiling before then.
Economists say the U.S. and the rest of the world will plunge into recession if the country stops paying its bills, as many countries rely on U.S. Treasuries to stabilize their economies.
Republicans have said they will resist raising the debt ceiling unless they cut last year’s appropriations and rein in future spending. They blamed the highest inflation in 40 years on a series of trillion-dollar actions to jump-start the economy during the COVID pandemic. Spending has largely helped, with the nation’s economy growing by 2.9% over the past year, unemployment near record lows and more jobs being created than ever before. Inflation has come down, but remains stubbornly high.
House Speaker Kevin McCarthy (Kevin McCarthy) said he wanted a “responsible increase in the debt ceiling” linked to spending restraint. President Biden said he was open to general discussions on fiscal issues, but he would not use them as part of debt-limit talks.
The Republican strategy is really about messaging — cutting last year’s appropriations would be lagniappe.
The first bill introduced by the newly elected Republican majority is a partisan ballot aimed at eliminating about $80 billion in IRS funding. McCarthy and his fellow Republicans have somewhat hypocritically painted the IRS money (part of Biden’s inflation reduction bill) as a tool to hire more than 80,000 taxmen to go after ordinary people. In fact, the money used to fund new hires was used not only to fill vacancies for surrogates, but also to fill vacancies for support staff over a 10-year period.
Cuts to other items in the federal budget will follow the same line.
Regardless of how the Republican argument is articulated, the fact that the spending is already written into law, and changing that law would require the consent of both houses of Congress and the president is highly unlikely.
The Seizure Control Act directs the executive branch to spend exactly what the budget bill mandates. It was passed in 1974 because President Richard Nixon had been disallowing some executive agencies to use congressional funds.
“You can’t shelve it because you don’t like it,” Shalanda Young, director of the Office of Management and Budget, said in an interview Wednesday. “We started in December (in the omnibus bill) with direction on how the money will be spent.”
The OMB is the largest office in the White House and is responsible for putting together the president’s proposed budget and ensuring that funds approved by Congress are spent appropriately. The Treasury Department is responsible for writing checks.
Young noted that changing budgets is a line-by-line affair. Republicans must specifically target the programs they want to cancel.
“You’re going to have to pass another law that cuts specific programs,” Young said. “Easy to say, but what would that be? You mean cuts to housing? Get a head start? Child care? You have to tell people which benefits are going to be cut.”
After earning graduate degrees from Scotlandville Magnet School, Loyola University in New Orleans, and Tulane University, Young moved from Baton Rouge to Washington, where he eventually became chief staffer on the House Appropriations Committee before joining OMB. Over the years, she said, she has answered many questions from members of Congress about why the budget was put together the way it was.
“You hear a lot of frustration from people who have been in state government, no matter which state, because it’s run so differently,” Yang said. “People are fighting over process here. It’s going to get ugly.”
