Kevin McCarthy, Joe Biden, and the Deeply Unserious Debate Over the Debt Ceiling

Published

3 years ago

April 19, 2023

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As the clock ticks toward a possible default on the national debt, Speaker of the House Kevin McCarthy (RCalif.) and top Democrats in Washingtonas well as media allies on both sidesare locked in a staring contest over who can take the matter less seriously.

The latest development in this slow-motion train wreck was a speech McCarthy delivered Monday from the New York Stock Exchange. “Debt limit negotiations are an opportunity to examine our nation’s finances,” he said, stressing that a bill to raise the nation’s debt limit would only get through the House if it was pared with spending cuts. The House will vote on such a bill within “the coming weeks,” McCarthy promised.

So far, so good. A debt default would be an economic catastrophe for the country and should be averted at all costsbut McCarthy is right that this is a good opportunity to examine America’s out-of-control borrowing habit. Raising the debt ceiling doesn’t authorize more borrowing. It merely gives the Treasury permission to borrow funds to pay for what Congress has previously agreed to spend. But it is the moment when past congressional budgeting decisions come home to roostthe equivalent of seeing your credit card statement after a blowout vacation that you couldn’t afford. You still have to pay the bills, but it should be a wake-up call.

But while McCarthy is saying some of the right things about this situation, he still doesn’t seem to have much of a plan for what to do. Monday’s speech was devoid of specifics beyond a promise to cut spending back to last year’s levelssomething he’s been proposing since January, just weeks after the passage of a year-end omnibus bill that hiked spending across the boardand some rather vague promises about tightening work requirements for welfare programs.

Notably absent from Monday’s speech was any promise about balancing the budget in 10 years, something that had been part of the House GOP’s earlier list of demands for the debt ceiling negotiations. AsReason has previously noted, it’s pretty much impossible to make the budget balance in a decade without making serious alternations to entitlement programs including Social Security and Medicare, and McCarthy has promised not to touch those as part of the debt ceiling package.

Importantly, it remains unclear whether even this narrower list of prospective ideas can pass the GOP-controlled House. Asked in an interview on CNBC just moments after his New York speech ended, McCarthy refused to give a straight answer about whether he had enough votes for this still-murky debt ceiling package.

As Democrats were quick to point out, McCarthy’s “plan” is little more than a series of starting points for negotiations. “What we got today was not a plan,” Senate Majority Leader Chuck Schumer (DN.Y.) told NBC News after McCarthy’s speech. “It was a recycled pile of the same things he’s been saying for months.”

But, well, Democrats are just recycling the same things they’ve been saying for months too. The White House has been steadfast in refusing to negotiate with House Republicans until McCarthy presents a full-fledged budget proposal like the one President Joe Biden presented on March 9. “I don’t know what we’re negotiating if I don’t know what they want, what they’re going to do,” Biden reiterated to reporters over the weekend.

This is an unserious approach too. Both McCarthy and Biden (and everyone else involved) are well aware of why Democrats want to see a full Republican budget plan before they start negotiatingand it has very little to do with the debt ceiling. Instead, Democrats will pick apart the proposal to score political points by criticizing whatever spending cuts the House GOP outlines.

Indeed, Democrats and their allies are already eager to demagogue the bare bones of what McCarthy has outlined. Liberal Substacker Matt Yglesias says it is “irresponsible for Kevin McCarthy to run around threatening to blow up the global economy in order to snatch poor people’s health care away.” At Talking Points Memo,David Kurtz is already decrying the “draconian spending cuts” that McCarthy has proposed. That’s insane, because McCarthy’s so-called plan merely calls for rolling back federal spending to the level it was at in 2022a whole four months ago.

Here’s the really crazy thing: Even if Congress did somehow manage to hold the discretionary spending level next year, overall spending would still increase. That’s because the $1.7 trillion discretionary budget is only a fraction of federal spending. Other itemslike the so-called mandatory spending on entitlements like Social Security and Medicare as well as the rapidlyincreasinginterest costsconnected to the $31 trillion national debtwill continue to grow and drive federal deficits higher.

The crux of this problem is two-fold. First, Republicans have spent the better part of the past decade completely ignoring fiscal policywhile in many cases actively chasing out members who did care about this stuff. As a result, the GOP has very little institutional sense of what a solidly conservative federal budget would actually look like. Is there any spending plan that would get the support of all 222 Republican members right now? McCarthy doesn’t seem to know.

Second, Democrats have demonstrated an utter unwillingness to acknowledge that America has a serious borrowing problem, which must be the starting point for any negotiation about the debt ceiling regardless of what other policies may or may not end up being part of the final package. They don’t need to see a full budget proposal to acknowledge things like the Congressional Budget Office’s forecast that says the federal government is on track to spend $10.5 trillion on interest payments in the next decadeand more if interest rates remain higher than expected.

Why should Republicans put forth a budget plan when they know in advance that Democrats only want to use it to paint the GOP as a party of benefit-cutting skinflints? Why should Democrats negotiate in good faith when they know quite well that Republicans only care about fiscal responsibility when a Dem is in the White House? Neither side has much to gain from doing what the other wants, so no one moves.

But the impasse created by years of poor, myopic decision making in Washington is pushing the federal government ever closer to a dangerous cliff. McCarthy and Biden need to get serious about this, and soon.

Politics

Budget 2025: Over a third of Britons think Rachel Reeves exaggerated bad news

Published

40 mins ago

December 2, 2025

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Budget 2025: Over a third of Britons think Rachel Reeves exaggerated bad news

Over a third of people think Rachel Reeves exaggerated economic bad news in the run-up to the budget – twice as many as thought the chancellor was being honest, a new Sky News poll has found.

Some 37% told a YouGov-Sky News poll that Ms Reeves made out things were worse than they really are. This is much higher than the 18% who said she was broadly honest, and the 13% who said things were better than she presented.

This comes in an in-depth look at the public reaction to the budget by YouGov, which suggests widespread disenchantment in the performance of the chancellor.

Just 8% think the budget will leave the country as a whole better off, while 2% think it will leave them and their family better off.

Some 52% think the country will be worse off because of the budget, and 50% think they and their family will be worse off.

This suggests the prime minister and chancellor will struggle to sell last week’s set-piece as one that helps with the cost of living.

Some 20% think the budget worried too much about help for older people and didn’t have enough for younger people, while 23% think the reverse.

The poll found 57% think the chancellor broke Labour’s election promises, while 13% think she did not and 30% are not sure. Some 54% said the budget was unfair, including 16% of Labour voters.

And it arguably gets worse…

This comes as the latest Sky News-Times-YouGov poll showed Labour and the Tories are now neck and neck among voters.

The two parties are tied on 19% each, behind Reform UK on 26%. The Greens are on 16%, while the Liberal Democrats are on 14%.

This is broadly consistent with last week, suggesting the budget has not had a dramatic impact on people’s views.

However, the verdict on Labour’s economic competence has declined further post-budget.

Asked who they would trust with the economy, Labour are now on 10% – lower than Liz Truss, who oversaw the 2022 mini-budget, and also lower than Jeremy Corbyn in the 2019 election.

The Tories come top of the list of parties trusted on the economy on 17%, with Reform UK second on 13%, Greens on 8% and Lib Dems on 5%. Nearly half, 47%, don’t know or say none of them.

Only 57% of current Labour voters say the party would do the best job at managing the economy, falling to 25% among those who voted Labour in the 2024 election.

Some 63% of voters think Ms Reeves is doing a bad job, including 20% of current Labour voters, while just 11% of all voters think she is doing a good job.

A higher proportion – 69% – think Sir Keir Starmer is doing a bad job.

World

Pope Leo urges Donald Trump not to try to oust Venezuelan president by force

Published

40 mins ago

December 2, 2025

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Pope Leo urges Donald Trump not to try to oust Venezuelan president by force

The Pope has urged Donald Trump not to try to oust Venezuelan President Nicolas Maduro using military force.

Leo, the first American pontiff, said it would be better to attempt dialogue or impose economic pressure on Venezuela if Washington wants to pursue change there.

The Trump administration has been weighing options to combat what it has portrayed as Mr Maduro’s role in supplying illegal drugs that have killed Americans.

The socialist Venezuelan president has denied having any links to the illegal drug trade.

Asked during a news conference about President Trump’s threats to remove Mr Maduro by force, the Pope said: “It is better to search for ways of dialogue, or perhaps pressure, including economic pressure.”

He added that Washington should search for other ways to achieve change “if that is what they want to do in the United States”.

The Pope was speaking as he flew home from a visit to Turkey and Lebanon – his first overseas trip in the role.

Mr Maduro has said Venezuelans are ready to defend their country as the US considers a land attack.

The president held a rally in Caracas amid heightened tensions with Mr Trump’s administration, which has been targeting what it says are boats carrying drug smugglers.

Mr Trump met his national security team on Monday evening, having warned last week that land strikes would start “very soon”.

It’s not been confirmed what was discussed at the meeting, but White House press secretary Karoline Leavitt told reporters: “There’s many options at the president’s disposal that are on the table – and I’ll let him speak on those.”

US forces have carried out at least 21 strikes on boats it claims were carrying narcotics to its shores over the last few months.

Mr Maduro – widely considered a dictator by the West – said on Monday that Venezuelans are ready “to defend [the country] and lead it to the path of peace”.

“We have lived through 22 weeks of aggression that can only be described as psychological terrorism,” he said.

Venezuela has said the boat attacks, which have killed more than 80 people, amount to murder – and that Mr Trump’s true motivation is to oust Mr Maduro and access its oil.

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World

Maduro says Venezuela ready to defend itself as US considers potential land attack

Published

40 mins ago

December 2, 2025

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Maduro says Venezuela ready to defend itself as US considers potential land attack

Nicolas Maduro has said Venezuelans are ready to defend their country as the US considers a land attack.

The president held a rally in Caracas amid heightened tensions with Donald Trump’s administration, which has been targeting what it says are boats carrying drug smugglers.

Mr Trump met his national security team on Monday evening, having warned last week that land strikes would start “very soon”.

US forces have carried out at least 21 strikes on boats it claims were carrying narcotics to its shores over the last few months, and the White House has accused Mr Maduro of being involved in the drugs trade – a claim he denies.

‘Psychological terrorism’

Mr Maduro – widely considered a dictator by the West – said on Monday that Venezuelans are ready “to defend [the country] and lead it to the path of peace”.

“We have lived through 22 weeks of aggression that can only be described as psychological terrorism,” he said.

Venezuela has said the boat attacks, which have killed more than 80 people, amount to murder – and that Mr Trump’s true motivation is to oust Mr Maduro and access its oil.

Concerns have been raised over the legality of the US attacks, which the Pentagon has sought to justify by designating the gangs as foreign terror organisations.

Controversy over US strikes

Tensions remain high over America’s large deployment in the Caribbean Sea and eastern Pacific, which includes its flagship aircraft carrier and thousands of troops.

The US has released videos of boats being blown up but has not provided evidence – such as photos of drugs – to support the smuggling claims.

Controversy also surrounds the first incident, on 2 September, in which 11 people were killed – with a follow-up strike targeting the boat after the first attack left two survivors in the water.

US media reported defence secretary Pete Hegseth gave an order that everyone on board should be killed.

However, there are concerns about the legality of the second strike if the survivors posed no threat.

Mr Hegseth dismissed the reporting as “fake news” and insisted all actions in the region are compliant with US and international law.

“Every trafficker we kill is affiliated with a Designated Terrorist Organization,” he said on X.

Mr Trump said on Sunday he would not have wanted a second strike and that Mr Hegseth had denied giving such an order.

Ms Leavitt confirmed on Monday that the boat had been hit by a second strike – but denied Mr Hegseth gave the order for the follow-up.

Instead, she said he had authorised US navy vice admiral Frank Bradley to attack, and the admiral acted “well within his authority and the law, directing the engagement to ensure the boat was destroyed and the threat to the US was eliminated”.

As the US weighs its next steps, Mr Trump said on Sunday he had spoken to Mr Maduro by phone and that the conversation went neither “well or badly”.

In recent days, he also stated that Venezuela’s airspace should be considered closed – with the South American nation calling it a “colonial threat” and “illegal, and unjustified aggression”.