The House of Representatives Republican majority voted on April 26th to raise or suspend the debt ceiling, which now stands at $31.4 trillion, for a finite period of time. In return, the bill that the House approved also calls for significant cuts in spending and in green energy tax breaks. All Democrats voted no, along with 4 dissenting Republicans.
The bill combines raising the federal government’s borrowing authority by $1.5 trillion or suspending the debt ceiling through March 2024, whichever comes first, with approximately $4.8 trillion of cuts in spending and in tax breaks over the next ten years. The plan would freeze federal government spending at the fiscal 2022 level of $1.47 trillion and then cap growth at 1% annually over the next 10 years.
Social Security and Medicare would not be affected by the spending caps. Neither would the Pentagon’s budget. Contrary to the Democrats’ false talking points, Republicans have also committed to keeping veterans’ benefits intact.
After passage of the bill, called the Limit, Save, Grow, Act of 2023, by a 217-215 vote, Speaker Kevin McCarthy told reporters: “We lifted the debt limit; we’ve sent it to the Senate; we’ve done our job.” He added that it was time for President Biden to finally “sit down and negotiate.”
The last time that President Biden agreed to speak face-to-face with Speaker McCarthy was in February. The same president who promised to seek bipartisan solutions to the nation’s problems remained as defiant as ever for more than two months by refusing to negotiate at all. Indeed, Biden laid down his marker again on April 26th, just a few short hours before the House passed its bill.
“I’m happy to meet with McCarthy, but not on whether or not the debt limit gets extended,” President Biden told reporters during a joint White House press conference with South Korean President Yoon Suk Yeol. “That’s not negotiable.”
President Biden is soft on the Chinese Communist regime, America’s number one adversary. But when it comes to negotiating with the speaker of the U.S. House of Representatives, who is second in line to succeed the president after the vice president, President Biden has relished playing the role of Mister Tough Guy.
The president finally confronted reality and agreed to hold a meeting with Speaker McCarthy and other congressional leaders on May 9th following an ominous warning by Treasury Secretary Janet Yellen. She wrote a letter to congressional leaders on May 1st stating that the United States was likely to run out of money to pay all its outstanding obligations by June 1st. This is sooner than originally thought.
But President Biden is still reportedly insisting on a precondition for the talks that the debt ceiling and budget issues must be dealt with on separate tracks even though these issues are necessarily interrelated. Raising the debt ceiling repeatedly without taking concrete steps to cut the Gordian knot of America’s strangling public debt burden is simply kicking the can down the road.
The Republicans in the House have provided a responsible pathway to avoid default while trying to restore fiscal sanity. But Senate Democrat Majority Leader Chuck Schumer has declared that the House bill is dead on arrival in the Senate. It is the Biden administration and the Democrats in Congress who are stubbornly standing in the way of a reasonable solution and hurtling the United States and the global economy towards a possible economic catastrophe.
“They say they are going to default unless I agree to all these wacko notions they have.” President Biden declared a week before the House passed its debt ceiling extension and budget cut bill.
Here are some of the Republicans’ proposed cuts in spending and in green energy tax breaks that President Biden finds so “wacko.”
Cancel the Unspent COVID-19 Funds
Most of the $5.2 trillion that Congress approved between 2020 and 2022 to deal with the COVID-19 crisis has been spent. However, there remains an estimated unspent amount between $50 billion and $70 billion.
“The American people are tired of politicians who use Covid as an excuse for more extreme inflationary spending,” Speaker McCarthy said on April 17th at the New York Stock Exchange. “If the money was authorized to fight the pandemic, what was not spent during the pandemic should not be spent after the pandemic is over.”
That makes common sense, especially since President Biden signed into law a resolution on April 10, 2023, which terminated the national emergency related to the COVID-19 pandemic. But common sense is virtually non-existent amongst Democrats who oppose clawing back the unused COVID-19 funds.
Repeal the Huge IRS Expansion Appropriation
President Biden and his fellow Democrats in Congress pushed through money for the IRS last year, when they controlled both the House and the Senate as well as the White House, to fund a huge hiring binge. Almost $80 billion will go towards hiring new IRS agents.
Democrats claim that the extra IRS agents will be devoted to auditing ultra wealthy taxpayers. If so, then why did they vote in the last session of Congress against prohibiting the IRS from using any of its new funding windfall for audits on American taxpayers with taxable incomes below $400,000? Because the truth is that middle class taxpayers, not the super-rich, will bear the brunt of more IRS enforcement and the Democrats do not want to tie the IRS agents’ hands. Their protestations that people making less than $400,000 will not be affected by the IRS hiring binge are meaningless.
Who are some of the new agents that the IRS is looking to hire? The IRS’s Criminal Investigation division wants to hire at least 360 special agents in all fifty states who will be armed. At least the IRS’s run-of-the-mill auditors themselves will not be armed. However, if an auditor detects possible tax fraud and the IRS’s Criminal Investigation division takes over the case, armed special agents may be called upon to take enforcement actions and use lethal force if necessary.
The last thing we need is a further weaponized and expanded government enforcement agency with a track record of hounding taxpayers for political reasons.
Cancellation of President Biden’s Student Debt Relief Windfall
The House bill would undo President Biden’s executive order shifting higher education student debt obligations from those who benefited from the loans to the taxpayers. The president’s estimated $400 billion giveaway to college and university students is both unfair and an enormously wasteful expenditure of taxpayers’ money.
The Supreme Court may strike down President Biden’s executive order on the grounds that it exceeded the president’s authority, making congressional action unnecessary. But if that does not happen, eliminating this extravagant boondoggle as part of a deal raising or suspending the debt ceiling is a must.
New Work/Training Requirements for Medicaid and Food Assistance Recipients
Able-bodied childless adults through age 55 would be required to either work part-time for a minimum number of hours a week or month or to participate in a job training program to qualify for specific welfare benefits. President Biden seems to think that it is “wacko” to ask recipients of taxpayer-funded welfare benefits to take some responsibility for their own lives and to give back to the community. That is quite a reversal for Joe Biden who, as a senator, voted for the welfare reform bill that President Bill Clinton signed into law in 1996, which included a work requirement.
“The culture of welfare must be replaced with the culture of work,” then-Senator Biden said on the Senate floor. “The culture of dependence must be replaced with the culture of self-sufficiency and personal responsibility.”
That was when Joe Biden was a sensible centrist who believed, like most Americans, in the dignity of work and self-reliance. But now, President Biden, a puppet of his left-wing progressive base, thinks that this traditional American idea is “wacko.”
Cutting Back on Green Energy Tax Breaks
The Democrats vastly underestimated the cost of green energy tax credit incentives contained in their misnamed Inflation Reduction Act of 2022. When President Biden signed the Inflation Reduction Act back in August 2022, the cost of its green energy tax incentives and expenditures, much of which benefit corporations, was an estimated $271 billion over ten years. Less than nine months later, various institutions have published cost estimates of the green energy tax incentives that are more than twice as much as what we were originally told they would cost.
The House’s Limit, Save, Grow, Act of 2023 hits the pause button by repealing market distorting green energy tax credits and wasteful subsidies, which it is currently estimated would save at least $515 billion by 2033.
While the House’s bill raises or suspends the debt ceiling to avoid default, it also makes serious strides toward getting America’s fiscal house in order. President Biden and his Democrat friends in Congress owe it to the country to take the ballooning national debt problem seriously and seek common ground with the Republicans to solve it once and for all. So far, that does not look likely.