The Republicans’ use of the debt ceiling to threaten a forced default and non-payment of other current, approved, and legal obligations – including salaries and benefits owed – is a form of extortion that should not be allowed in a democracy.
It had nothing to do with reducing the public debt. The total reduction of the public debt from the Republican House bill (the Limit, Save, Grow Act, HR 2811) would have been less than 0.5 percent.
Furthermore, the current public debt poses no threat to the US economy. The annual net interest payments on the debt by the federal government were just 1.9 percent of GDP in 2022, which is quite reasonable. During the 1990s, this figure averaged about 3 percent annually, and the United States experienced an economic expansion that was the longest we had lived through up to that time.
But Republicans have tried to use a fictional “threat” of indebtedness in their efforts to force deep spending and benefit cuts, including in SNAP (food assistance), Medicaid, and a broad range of programs that help working-class people, putting millions of Americans at risk of harm. In the end, they succeeded in subjecting 50- to 54-year-olds to an ineffective work-hours test in SNAP, and further ratcheting up the already extreme work requirements in the Temporary Assistance for Needy Families program. Hundreds of thousands of older people, parents, and children will lose benefits. As CEPR’s experts have documented, these provisions aren’t about work — they’re sending a message about who is “in” and rewarded, and who is “out” and punished.
When it comes to climate, one of the most ludicrous claims in the debt ceiling deal is that finishing the Mountain Valley Pipeline project would “reduce carbon emissions and facilitate the energy transition.” There is no evidence whatsoever that providing federal funding to increase reliance on natural gas products would reduce carbon emissions. Based on the deal’s own language, the project would increase natural gas consumption, which, of course, is a major source of carbon emissions. Congress would be better off shifting that money to renewable energy projects that aren’t nearly as dangerous.
Going forward, this kind of extortion should never be allowed. The administration should ignore such threats and continue to pay its obligations, including debt service, and borrow as needed. The Republicans could take their demands to the Supreme Court. Of course, we have seen that the Supreme Court is “captured” by the Republicans, as more than two dozen Senators have noted in a recent report. As they wrote in the report, “The biggest right-wing donors control the Republican Party and have captured the Supreme Court.”
But the Supreme Court is also plagued by corruption scandals, and public trust in the institution has fallen dramatically. They would be very unlikely to intervene on behalf of these illegitimate, unconstitutional threats to harm the economy in order to force the will of House Republican leadership on the rest of the government.