America is back at the brink—Congress has borrowed as much as it can legally, and House Speaker Nancy Pelosi says if it doesn’t raise the debt ceiling, the U.S. will be forced into default.
But the truth is that the full faith and credit of the U.S. is at stake because of excessive spending in Washington. Republicans should demand changes that rein in spending, the real danger to our economy, made much, much worse by the Democrats’ latest $5 trillion for part of the so-called “Build Back Better” plan allocated to “human infrastructure” spending (the reconciliation bill).
As our friend Stephen Moore highlights, the Democrats own this crisis—and in the last six months, they’ve proposed $11 trillion of spending. Their spending, especially as outlined in the reconciliation bill, would further bankrupt the U.S. and fundamentally transform our nation—and not for the better.
From its privileged perspective over on K Street in D.C., the Washington Post opines that “this is not Ronald Reagan’s Republican Party.” It cites past debt ceiling battles and claims that congressional Republicans “are inviting economic calamity.”
It’s true that Republicans have raised the debt ceiling in the past. But in key instances, such as the 1985 Gramm-Rudman-Hollings Act (under Reagan himself), raising the ceiling was accompanied by a plan to reduce the deficit. Deficit hawks leveraged the debt ceiling vote to force the big spenders in Congress to face the facts—deficits add up, as our current $28.8 trillion national debt shows. They haven’t achieved this every time—there have been far too many “clean” debt ceiling bills that included no reforms—but enough to show us the way now.
That’s why it’s unreasonable for Speaker Pelosi to suddenly rediscover bipartisanship, as she calls for Congress to “come together” to enable her profligate spending. The GOP members of Congress who watched her rip up President Trump’s speech in 2020 know that the Speaker Pelosi of 2021 will not even listen to their concerns about the ceaseless printing of money at the Federal Reserve, about the inflation pressing us all, or about the future generations who will have to pay all of this back.
What should Republicans do? Stand fast. Be firm. Don’t bend. And support reforms that save America. The Democrats don’t have a great track record on their apocalyptic warnings, so the GOP shouldn’t fall for this one. There are three possible outcomes here, and the biggest disaster would be Republican acquiescence.
First, the Democrats can raise the debt ceiling themselves—they have the votes, in theory. They might have to convince their saner members, such as Sen. Joe Manchin of West Virginia, but with Vice President Kamala Harris breaking a tie, they would have the 51 votes they need.
From a GOP perspective, this would have advantages. As my colleague Wesley Coopersmith points out, Democrats would then completely own the deficit, and every dollar they make rain on their pet projects would weigh against President Biden’s legacy.
A second possible outcome is what Sen. Machin could force—a “strategic pause” of the reconciliation bill. As Sen. Manchin points out, “making budgetary decisions under artificial political deadlines never leads to good policy or sound decisions.” The political calculus is changing, and Democrats in leadership know this. In these circumstances, a pause can sometimes be as good as a “no.”
The third outcome would be Republicans caving to the pressure from Speaker Pelosi and Senate Majority Leader Chuck Schumer, voting to increase the debt ceiling and thereby taking some ownership in not only the higher debt limit, but also the massive spending it will enable.
So let the Democrats fight it out themselves. In the meantime, Republicans should sign on to our Responsible American Budget—a key cure for what’s wrong in Washington right now.
Irresponsible government spending damages the productive private sector through redistribution of resources, higher taxes, higher price inflation, and higher interest rates, reducing Americans’ real incomes, job opportunities, and prosperity.
At the state level, Texas has addressed runaway spending with the Conservative Texas Budget. Its main premise is that government shouldn’t grow any faster than the average taxpayer’s ability to pay for it. To provide a bright line marking the limit, we use a proven, simple formula: population growth plus inflation.
The Responsible American Budget would use this success as a model to help save America. Because high taxes and debt are always and everywhere a government spending phenomenon, this proposal is a valuable step toward limiting the footprint of government, allowing Americans more opportunities to flourish.