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debt default
Matt Gaetz Openly Confirms Republicans See US Economy as 'Our Hostage'
"A key player in the extreme MAGA House majority now admits what anyone paying attention has suspected all along," said one watchdog group.
May 24, 2023
Through their actions in recent months, House Republicans have made clear that they view the debt ceiling standoff as a hostage situation that they can exploit to advance their political agenda—which includes draconian cuts to social programs and massive handouts to the fossil fuel industry.
On Tuesday, just days before the June 1 "X-date," Rep. Matt Gaetz (R-Fla.) came right out and admitted it, telling reporters that "my conservative colleagues for the most part support Limit, Save, Grow, and they don't feel like we should negotiate with our hostage."
Semafor's Joseph Zeballos-Roig published audio of Gaetz's comments on Twitter:
\u201cThere\u2019s a lot of interest in the Gaetz audio, so here it is. I conducted a brief interview with him before a House vote earlier today to get his views on debt limit talks. @semafor \n\nH/t @joeposner @thejulianlim\u201d— Joseph Zeballos-Roig (@Joseph Zeballos-Roig) 1684866850
The Limit, Save, Grow Act is legislation that Republicans passed in a party-line vote last month, staking out their position that the debt ceiling shouldn't be raised unless rich tax cheats are protected and an axe is taken to spending on federal nutrition assistance, Medicaid, affordable housing, childcare, and other key programs.
The House GOP, officially led by Speaker Kevin McCarthy (R-Calif.) but heavily influenced by the far-right Freedom Caucus, has held to that position, threatening to force a debt default and unleash global economic chaos unless their demands are met.
Gaetz, a member of the House Freedom Caucus, suggested Tuesday that the deal McCarthy struck with his far-right flank to secure the speakership—specifically the rule allowing just one lawmaker to call a vote to unseat the speaker—has kept the Republican leader committed to debt ceiling brinkmanship.
"I believe the one-person motion to vacate has given us the best version of Speaker McCarthy and I think he's doing a good job," Gaetz said Tuesday.
Democratic lawmakers and progressive watchdog groups saw Gaetz's remarks as a frank acknowledgment of what they've said since the start of the debt ceiling standoff.
"A key player in the extreme MAGA House majority now admits what anyone paying attention has suspected all along: Congress Republicans consider the U.S. economy and millions of jobs a 'hostage' while making unreasonable austerity demands that especially hurt low-income veterans and seniors," said Jeremy Funk, spokesman for Accountable.US. "Anyone who doubts the looming default crisis and recession is not entirely manufactured by the MAGA majority need only give the fringe Freedom Caucus a call and hear it from the horse's mouth."
Rep. Brendan Boyle (D-Pa.), the top Democrat on the House Budget Committee, wrote on Twitter that "Matt Gaetz just admitted Republicans are holding the U.S. economy hostage."
"The pro-default extremists in the GOP are willing to risk economic calamity to force their cruel cuts on American families," Boyle wrote. "House Democrats will not let that happen."
Boyle is leading a longshot procedural effort known as a discharge petition to force a vote on a debt ceiling increase as the Republican leadership remains committed to pursuing deep spending cuts that Democrats in the House and Senate have dismissed as nonstarters.
Not a single House Republican has signed the discharge petition, and two Democrats—Reps. Jared Golden of Maine and Ed Case of Hawaii—have yet to sign.
With negotiations between the White House and Republicans at a standstill, a growing number of congressional lawmakers—including prominent progressives such as Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.)—are imploring President Joe Biden to use his 14th Amendment authority to unilaterally avert a default, an option the president has thus far resisted.
Rep. Alexandria Ocasio-Cortez (D-N.Y.), who has said the 14th Amendment "should be on the table," pointed to Gaetz's comments Tuesday as further confirmation that Republicans are not negotiating in good faith.
"I want to be clear about what the Republican Party is taking hostage. It is not Democrats. It is the entire U.S. economy," Ocasio-Cortez toldCNN late Tuesday. "It is extreme, and it is not acceptable."
Rep. Ilhan Omar (D-Minn.) added on Twitter that Gaetz and the GOP "are playing a dangerous game and, like every hostage situation, someone is likely going to be hurt."
"We have to rescue the American people," she wrote.
An earlier version of this story incorrectly described Rep. Brendan Boyle (D-Pa.) as a Republican.
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House Dems Announce Bill to Expand Social Security as GOP Default Threat Imperils Payments
"No corner of America is safe if the Republicans blow up our economy, and that starts with Social Security," said Rep. Bill Pascrell.
May 23, 2023
A group of House Democrats on Tuesday began rolling out legislation to strengthen and expand Social Security as their Republican counterparts' debt ceiling brinkmanship threatens to disrupt the program's monthly payments, which keep millions of seniors and children across the U.S. out of poverty each year.
During a press conference, the Social Security 2100 Act's co-sponsors emphasized the potentially devastating impacts that a GOP-induced U.S. debt default would have on the nation's tens of millions of Social Security recipients, many of whom rely on the program for their sole source of income.
"Today, the entire American economy is teetering on the edge of destruction by a manufactured crisis. I don't think that's hyperbole," Rep. Bill Pascrell (D-N.J.) said Tuesday. "No corner of America is safe if the Republicans blow up our economy, and that starts with Social Security."
The National Committee to Preserve Social Security and Medicare has warned that a U.S. default could jeopardize Social Security payments by leaving the Treasury Department without the money to fulfill its obligations.
"While the Social Security trust funds held $2.852 trillion in U.S. government securities at the end of 2021, the Treasury Department must have cash to pay benefits when they are due," the group noted in a memo earlier this year. "Every month, the Treasury Department is required by law to make over $90 billion in payments to the 65 million retirees, disabled workers, widows, widowers, children, and spouses who receive Social Security benefits. The Treasury may not have enough incoming revenue to make those payments without the authority to cash in these securities."
"Absent the legal authority to borrow beyond the current ceiling," the group added, "Social Security, Medicare, Medicaid, and other payments will not be made on time and in full unless Congress approves an increase in the debt limit."
Rep. John Larson (D-Conn.), the lead author of the latest version of the Social Security 2100 Act, said during Tuesday's press conference that Social Security recipients are not "bargaining chips" and blasted Republican proposals to slash benefits.
"I think you have to give [former President Donald] Trump at least some credit for telling the Republicans, 'Are you crazy holding Social Security and Medicare hostage?'" Larson said, referring to Trump's criticism of the GOP's approach to the debt ceiling standoff earlier this year.
"They've kind of done the Michael Jackson moonwalk backwards trying to explain why all of their legislation, their study committee, that calls for 21% across-the-board cuts still remains out there in print," Larson added.
While it wouldn't directly target Social Security benefits, the debt ceiling bill that House Republicans passed late last month would slash funding for the Social Security Administration.
In contrast to Republican proposals, Larson's bill would increase benefits for all Social Security recipients by 2%—the first benefit enhancement in more than five decades—and adjust the current Cost-of-Living Adjustment (COLA) to better reflect the impacts of inflation, according to a summary provided by the Connecticut Democrat's office.
The bill would fund benefit increases by applying the Social Security payroll tax to earnings above $400,000 and targeting a loophole that allows the rich to avoid the tax.
Watch the House Democrats' press conference:
The new bill comes as the Treasury Department is reportedly scrambling to find ways to keep making payments as the June 1 "X-date" nears and as Republicans continue to oppose a clean debt limit increase.
"Without additional borrowing, a fresh burst of tax revenue, or new ways to slow spending, the federal government expects to miss a payment for the first time in modern history in early June," The Washington Postreported Tuesday. "To put off the so-called 'X-date' when reserves run dry, Treasury officials have asked their counterparts at federal agencies about the flexibility of payments due before early June."
Outside advocacy groups, meanwhile, are increasingly sounding the alarm about the impact that a default could have on vulnerable seniors.
Retired Americans PAC, a political arm of the Alliance for Retired Americans, launched an ad campaign on Tuesday warning that "politicians in Congress are putting our Social Security benefits at risk," showing clips of House Speaker Kevin McCarthy (R-Calif.), Rep. Matt Gaetz (R-Fla.), and other Republican lawmakers.
"The Social Security payments that we've earned after a lifetime of work could be held up, hurting millions of seniors who depend on Social Security to cover the basics like food, gas, and prescriptions," the ad warns.
Richard Fiesta, executive director of the Alliance for Retired Americans, said Tuesday that "seniors earned their Social Security benefits over a lifetime of work and rely on them to pay for food, prescriptions, and other necessities."
"Older Americans will not support any politician who jeopardizes their benefits for partisan games," he added.
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'Pretty Troubling': Progressives Raise Concerns Over White House Comments on Spending Cuts
President Joe Biden "should not give in to hostage-taking," said one economist.
May 12, 2023
After meeting with congressional leaders earlier this week as the U.S. barrels toward a catastrophic debt default, President Joe Biden said that "we should be cutting spending," a remark that fueled concerns among progressives that the White House is preparing to cede to at least some Republican demands in exchange for a deal to lift the debt ceiling.
President Joe Biden has said repeatedly that he will not negotiate over the debt ceiling, and that the arguably unconstitutional limit must be raised without any preconditions.
But the president has also expressed openness to budget negotiations with House Republicans, who are using the threat of default as leverage to push for steep cuts to federal nutrition assistance, Medicaid, and other key government programs.
Biden insists the debt limit and budget talks are separate, but as Vox's Andrew Prokop noted Wednesday, the president is "negotiating before the GOP has released" the debt ceiling hostage.
Speaking to reporters at the White House on Tuesday after meeting with House Speaker Kevin McCarthy (R-Calif.), House Minority Leader Hakeem Jeffries (D-N.Y.), Senate Majority Leader Chuck Schumer (D-N.Y.), and Senate Minority Leader Mitch McConnell (R-Ky.), Biden said that he "made clear... that default is not an option."
But the president added that he also "made it clear that we can cut spending and cut the deficit."
Biden offered several examples of what he would prefer to cut, such as "tax subsidies for Big Oil companies" and prescription drug costs in Medicare—budget reforms that progressives support.
House Republicans, though, are pushing for far steeper and broader cuts to government spending, specifically demanding a cap on federal spending at fiscal year 2022 levels. Such a cap would entail steep cuts to critical government agencies and programs, particularly if the Pentagon budget is shielded.
While Biden has publicly rejected that GOP demand, Reutersreported Thursday that "White House officials acknowledge that they must accept some spending cuts or strict caps on future spending if they are to strike a deal."
Lindsay Owens, executive director of the Groundwork Collaborative, wrote Thursday that Biden's remarks this week and growing talk of a deal on spending caps are "pretty troubling."
Owens suggested the current negotiations are beginning to look like "2011-light," a reference to the last time the GOP used the debt ceiling as leverage to enact painful spending cuts. Biden, who was then serving as vice president, was the White House's chief negotiator during that standoff, which culminated in austerity legislation that badly hampered the U.S. recovery from the Great Recession.
In a statement to The Washington Post on Thursday, Owens said that Biden "should not give in to hostage-taking."
Instead, Owens added, he should "follow the lead of the majority of Americans who vastly prefer bringing in revenue through tax increases on the rich rather than making harmful spending cuts."
\u201cHere\u2019s the full quote\n\nPossible it\u2019s a purely rhetorical shift and signals no change in policy, but as the WH pushes for a spending deal with Republicans demanding budget cuts it\u2019s worth keeping a close eye on\u201d— Jeff Stein (@Jeff Stein) 1683834247
The president was previously scheduled to sit down with congressional leaders again on Friday, but the meeting was postponed until early next week as staffers for the White House and lawmakers continue to exchange proposals to avoid a default, which would wipe out millions of jobs and potentially spark a global economic crisis.
The Treasury Department recently warned that the debt ceiling could be breached as soon as June 1.
It's far from clear whether Biden's recent comments and signals emerging from the White House indicate a substantive concession to the House GOP's crusade for spending cuts.
But as talks continue with little public evidence of progress, observers are increasingly voicing alarm over the possibility of a deal that includes victories for House Republicans who are eager to boot millions of people off of safety net programs.
"It increasingly seems like the White House has decided to cave and is trying to slowly acclimate people to it, so there's no abrupt blink followed by shock and outrage," Brian Beutler, editor-in-chief of Crooked Media, warned Thursday, pointing to the Reuters reporting. "Just slowly increasing resignation. Pretty pathetic."
Slate's Alex Sammon similarly called the White House's seeming hints at spending concessions to Republicans "a horrific development," particularly "after Republicans routinely raised the debt ceiling under Trump" and "after Democrats had a trifecta for two years and could've raised it any time."
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