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Democratic Senators Rip Corporate Lobby for 'Cheerleading' GOP Default Threat and Tax Cuts
"The American people deserve to understand why you are supporting even more deficit-busting tax giveaways for giant corporations, while also cheerleading Republican demands to inflict painful, job-killing austerity on everyone else."
May 27, 2023
The Republican Party's debt-ceiling hostage scheme has benefited from the support of the United States' largest corporate lobbying organization, which has given its stamp of approval to the GOP's push for major federal spending cuts, punitive new work requirements for aid programs, and permitting changes sought by the fossil fuel industry.
While House Speaker Kevin McCarthy's (R-Calif.) office has reportedly not met with representatives of the U.S. Chamber of Commerce during the debt ceiling standoff, a representative of the powerful business group said earlier this week that such a meeting would be pointless given that the Chamber and the GOP are so closely aligned.
Neil Bradley, the Chamber's chief policy officer, told Politico earlier this week that a meeting with McCarthy would be a "cheerleading session."
"I see the relationship as respectful, so I'm not worried about wasting his time to come in and say, 'Look how much I agree with you,'" said Bradley, who previously served as McCarthy's deputy chief of staff.
In a letter to the Chamber's chief executive on Friday, a trio of Democratic senators led by Sen. Elizabeth Warren (D-Mass.) slammed Bradley's remarks and demanded to know "how the Chamber justifies supporting the Republican agenda of continued tax cuts for the wealthy, while cheerleading for threats to impose a default and austerity for everyone else."
"Instead of pressing the speaker to drop his radical demands and pass a clean debt limit increase, Bradley noted that the Chamber has pressed the White House to come to a bipartisan agreement with McCarthy," the letter reads. "Indeed, Bradley noted that the Chamber is aligned with House Republicans on their debt ceiling demands, including on spending caps, work requirements, and energy permitting."
Warren, joined by Sens. Sheldon Whitehouse (D-R.I.) and Ed Markey (D-Mass.), accused the Chamber of fully backing the GOP's "shameless hypocrisy" by lobbying for tax breaks that Republicans are expected to include in a tax cut package coming sometime next month.
"The American people deserve to understand why you are supporting even more deficit-busting tax giveaways for giant corporations, while also cheerleading Republican demands to inflict painful, job-killing austerity on everyone else in a pretense of 'fiscal responsibility,'" the senators wrote, demanding to know how much the Chamber has spent on tax-related lobbying this year and what discussions the group has had with Republicans on the House's tax-writing committee.
According to OpenSecrets, the Chamber has spent more than $19 million total on federal lobbying so far this year—the most of any organization. The Chamber says it has met with more than 150 Republican and Democratic lawmakers throughout the debt ceiling fight, which GOP Rep. Matt Gaetz (R-Fla.) publicly described as a hostage situation.
The Democratic senators' letter came as Treasury Secretary Janet Yellen warned that the federal government will run out of money to meet its obligations by June 5 if Congress does not raise the debt ceiling.
The Washington Postreported Friday that White House and GOP negotiators are "closing in on an agreement that would raise the debt ceiling by two years—a key priority of the Biden administration—while also essentially freezing government spending on domestic programs and slightly increasing funding for the military and veterans affairs."
When accounting for inflation, keeping non-military spending flat would mean potentially significant real-term cuts to key aid programs, from nutrition assistance to housing.
The Chamber has openly endorsed the GOP push for spending caps and warned President Joe Biden against using his 14th Amendment authority to unilaterally prevent a default, claiming such a move would be "as economically calamitous as a default."
On Friday, a top Treasury Department official said the White House will not invoke its 14th Amendment authority to continue paying the nation's bills if talks with the GOP collapse.
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Other Nations Baffled, Horrified by Very Idea of a Debt Ceiling as GOP Pushes US Toward Default
"We are an example to the world," wrote one American economist. "An example of what not to do."
May 19, 2023
Nations around the world are looking on with a mixture of alarm and bafflement as the United States hurtles toward an economy-wrecking default, with the Republican Party refusing to raise the country's globally unique debt limit without massive, harmful spending cuts.
The possibility of a U.S. default—a failure to pay the government's obligations—has already rattled global markets and prompted grave warnings from major institutions such as the International Monetary Fund, which said last week that a default would have "severe repercussions" for a world economy already facing the prospect of a central bank-induced recession.
The Washington Postreported Friday that the finance ministers of G7 nations have privately asked U.S. Treasury Secretary Janet Yellen for "updates on the status of negotiations between the White House and House Republicans" as officials from the rich countries gather in Hiroshima for their annual summit.
Finance ministers have also voiced their concerns publicly. German finance chief Christian Lindner said last week that he hopes "an adult decision will be made with regard to the development of American government finances and the associated effects on the global economy."
Kazuo Ueda, governor of the Bank of Japan, cautioned that a U.S. default could become a "big problem" that the Federal Reserve "may not be able to counteract."
"The United States is one among the few polities that have adopted and retained debt limits."
The U.S. debt limit, which currently sits at $31.4 trillion, is a "global outlier," the Atlantic Council's Mrugank Bhusari wrote in March, noting that "the United States is one among the few polities that have adopted and retained debt limits."
"Debt limits like the United States'... are not the norm—and they rarely cause major deadlocks in the few countries that have adopted this tool," Bhusari observed. "Like the United States, Denmark also sets its debt limit as a nominal value. But that’s where the similarity ends. The Danish Parliament intentionally sets the ceiling sufficiently high such that it will not be crossed, rendering it no more than a formality."
"Like the United States and Denmark, Kenya also has a nominal debt limit. However, it is under the process of replacing the nominal limit with a limit as a percentage of GDP at 55%," Bhusari continued. "Australia briefly experimented with a debt limit similar to that of the United States, experienced the political infighting that Washington is familiar with, and abolished it soon after."
Citing one Latin America expert, the Post noted Friday that "a debt ceiling like the one that exists in the U.S. stirred debate" in Brazil, where the Lula government is aiming to loosen existing restraints on government spending.
The idea of imposing a strict debt limit "was shot down vehemently, thanks to the U.S. example," the Post reported.
"We are an example to the world," Stephanie Kelton, an American economist, wrote on Twitter. "An example of what not to do."
\u201cWe are an example to the world. An example of what not to do. https://t.co/K4ISWXTgkI\u201d— Stephanie Kelton (@Stephanie Kelton) 1684507808
The international community's reaction to the perilous U.S. debt ceiling standoff comes as President Joe Biden is facing growing pressure from lawmakers at home to end the crisis unilaterally if necessary by invoking the 14th Amendment, which states that "the public debt of the United States... shall not be questioned."
Progressives and legal scholars have long argued that the debt limit, first imposed by Congress in 1917, is unconstitutional and should be abolished—an argument that the National Association of Government Employees makes in a lawsuit filed in federal court 10 days ago.
But as The American Prospect's David Dayen wrote Friday, the plaintiffs "didn’t file a motion for immediate relief," so "the case has sat dormant."
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