How Kevin McCarthy's Debt-Limit Austerity Wastes Taxpayer Dollars
Congress's resistance to signing a clean debt-ceiling bill has already cost the Treasury $328 million. His debt ceiling would waste $115 billion more on oil companies and tax cheats.
“I still think we’re far apart,” House Speaker Kevin McCarthy said on Monday about the debt limit. Which is to say that the White House wants to raise the debt limit so Congress can pay its bills, and Congress doesn’t want to unless it can attach enormous spending cuts that not even McCarthy’s own caucus would support if they thought they had a chance in hell of becoming law.
The irony is that McCarthy’s austerity campaign, which would be better attached to budget negotiations than to debt-ceiling negotiations, is kind of expensive. It’s hard to tell what items in his debt-ceiling bill are serious and which aren’t, but the legislation contains $430 million in giveaways to the oil industry, including a reduction in royalty rates for oil drilling on federal land, and a clawback of $71 billion of the $80 billion that last year’s climate bill spent on the Internal Revenue Service, which, the Congressional Budget Office says, would drain $115 billion from the Treasury.
If that’s too speculative for you, the “extraordinary measures” in place since January to forestall default have already cost $328 million, which may not sound like much in a $6 trillion budget but represents, for example, most of this year’s budget request for the Peace Corps. There’s more to say about this, and I do in my latest New Republic piece. You can read it here.
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A fine third part to your accounting of the federal debt-ceiling confrontation of 2023. After reading the TNR piece I have three supplementary reactions to it (in a constructive sense):
1) If there is a negotiated solution, the bigger question is how many Democrats will be needed to vote for it in the House to counteract likely GOP holdouts. Just for reference, the Budget Control Act of 2011 passed the House by a vote of 269–161; 174 Republicans and 95 Democrats voted for it, while 66 Republicans and 95 Democrats voted against it... but at the time, the GOP had a majority of 242 to 193, not the current 222 to 213, and there had already been a government shutdown earlier in 2011 that surely laid the groundwork for the subsequent wrangling over the even more dangerous possibility of default.
2) What is the status of the NAGE lawsuit? Time is running low and it has appeared nowhere other than the initial news reports and this detailed presentation of the complaint that is fascinating (followed by the complaint itself...):
prospect.org/economy/2023-05-12-judicia… (free registration)
s3.documentcloud.org/documents/23808242… (totally free and rather readable itself)
3) Your comparison of the US Treasury's "extraordinary measures" with those we all employ on a household scale may be accurate but dangerously close to GOP political advertising the 80's. I guess it's applicable, but it doesn't project to potential gravity of an actual default... though if I am not mistaken, US bonds have never recovered their AAA rating since 2011 and that default was averted.