Opinions, Column

The World’s Worst Game of Chicken: The Debt Ceiling

Disorder has plagued the House of Representatives in recent weeks. Its 14 consecutive failed votes to elect a speaker and freshman representative George Santos’ loose relationship with the truth have made that clear. Though embarrassing for the House and harmful for its credibility with Americans, these controversies are unlikely to influence the average citizen’s life. A legislative priority that cannot be ignored, however, is raising the debt ceiling. If not raised soon, a cracked ceiling could become a devastating issue for the average American.

The United States’ “debt ceiling”—or the maximum amount of money the nation can owe while paying back its financial obligations—must be raised every year if the national debt increases. Raising this ceiling does not authorize new spending, but it simply allows the government to function at a deficit as it pays back existing debt. If this ceiling is not raised, the government will default on its debt to a variety of lenders—including American investors and foreign governments

This would lead to the immediate furlough of some 800,000 federal employees, the suspension of Social Security payments, and the inability to pay out veterans’ benefits—and these are just a few of the consequences. It may also cause a cascading economic downturn across the world economy, which according to Treasury Secretary Janet Yellen would be “a self-imposed calamity.”

This is not a faraway issue. In fact, the United States already hit the debt ceiling on Jan. 19. The Treasury Department has resorted to “extraordinary measures” to pay the U.S. government’s bills without borrowing even more money from its usual investors. In effect, the department is raiding employee retirement funds and moving other government savings to pay whatever bills come up. Using these types of funds can only work in the short term, however, and they will be depleted come June 5

A simple majority in both houses of Congress could raise this debt ceiling, but the political realities on the ground prevent this from happening. California Republican and Current Speaker of the House Kevin McCarthy had to make several concessions to the far right of his party to secure the speaker’s gavel, one of which was an informal agreement allowing them a seat at the table in debt ceiling negotiations

As a guarantor for this agreement, the proverbial “sword of Damocles” is hanging over McCarthy. At any moment, a cabal of representatives can initiate a vote to vacate his chair, another concession he granted his far-right opponents himself. For their part, Democrats are demanding a “clean” bill that raises the debt ceiling with no strings attached—there would be no additional legislation or rules in the bill beyond extending the limit. This simple demand from Democrats could make Republicans risk the public’s wrath—that is, if they cause a default through unreasonable negotiations.

Here I return to the title of this article: the world’s worst game of chicken. As the doomsday clock ticks slowly toward June 5, Congress must find some way to raise the debt ceiling, lest the government default. 

Or do they? Constitutional experts have raised several possibilities that the president could use to get around the debt ceiling. All of these rely on hypothetical constitutional gray areas that, if ever put into practice, would most certainly be challenged in the courts. Some political analysts have even said the president could force the Supreme Court into a “suicide pact” by using his executive power to pay off debts without the authorization of Congress. This choice would undoubtedly be challenged in the Supreme Court, resulting in either the abolition of the debt ceiling or an automatic default on U.S. debts.

The far more likely scenario is mounting pressure will force one or both parties to blink. McCarthy could reach some sort of compromise with the Democrats, which would likely enrage his right flank—as happened to former Speaker of the House John Boehner in 2011. Some more moderate Republicans could also turn on McCarthy and vote with the Democrats (six defectors would be needed). Either scenario may cost McCarthy his career. In the first scenario, his right-flank would scream until they’re blue in the face about how the Republicans could have gotten more out of the Democrats if they waited longer. In the latter scenario, his caucus may question his leadership skills and fitness to be the speaker. 

So, what will McCarthy do in the end? If I were to guess, it would be to cave in to the right flank and put the party over his country. Considering how much McCarthy gave up to get the speakership, McCarthy will likely choose the welfare of the American people over the speaker’s gavel. 

January 24, 2023
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