America pays its debts. It is a basic pledge. Millions of Americans who hold savings bonds or put their hard-earned money into federal treasury bonds need not worry. The bonds are good; the interest will be paid. The reason the dollar is the currency used by countries across the world is that America pays its debts.
Now Republicans are holding that pledge hostage, demanding savage cuts in spending or they will default on America’s debts by refusing to raise the debt ceiling. The threat is nuclear: failing to pay our debts will sink the value of the dollar, shake the global financial system, drive interest rates higher, and blow up the economy here and most likely across the world. Millions will be thrown out of work.
The threat is also stunningly irresponsible. The tantrum of a child or a mad person. Give us what we demand or we will blow up the economy.
The threat is about paying debts that the Congress has already accumulated. Over one-third of this debt — a staggering $8.3 trillion of it — was racked up in the four years under Republican President Donald Trump — largely from massive top-end tax cuts and for massive emergency spending in the pandemic. Now Republicans are saying that they will renege on the debts that they helped accumulate if they don’t get their way.
So what do they want? Amazingly, they refuse to say.
They have said what they won’t do: they won’t raise taxes, even on billionaires and corporations that pay literally nothing. They claim they won’t cut Social Security and Medicare. They insist on deep cuts — freezing spending at 2022 levels for a decade — but they won’t say what will get cut.
It is unlikely that they will cut the military budget or support for veterans. If they decided simply to freeze spending on the military and veterans, that would require cutting all domestic spending by nearly a fourth. That would mean slashing investment in public health, in roads and bridges, in air traffic control, in food safety, in education and job training, in science and technology programs, in affordable housing, in food and income support for impoverished mothers and children.
Traveling would get more dangerous. Our food and water would be less safe. We would lose the competition for the jobs of the future. Housing would get more expensive. Our schools would be poorer. Fewer would be able to afford training or college. More children would go hungry. No one likes to admit these things — but they are simply true.
In their 320-page bill, Republicans do identify some things that they want. They want to cut spending on Medicaid and food stamps by raising work requirements — although that doesn’t save much money. They want to erase investment in renewable energy while opening more subsidies to big oil and coal. They want to cut the money that would enable the IRS to audit corporations and the wealthy who are not paying the taxes they owe. That according to the Congress’ own budget office will end up costing a net of more than $100 billion in tax avoidance.
To justify this, they lie. They claim that the government has grown “bloated,” appealing to popular prejudices. In reality — as they know — federal civilian employment is less than it was 60 years ago, even though the population has grown dramatically since then.
Why not lay out what they plan to cut? Because they can’t agree among themselves. Because they don’t want to admit to supporting cuts that would be very unpopular — and corporate subsidies and rip-offs that are indefensible.
The Republican “plan” is not a serious proposal. They won’t even admit what it requires. They are offering a posture, not a policy. But our politics have become so partisan and so poisonous that few if any Republican moderates will offer a voice of reason.
President Biden has called on the Congress to honor our past debts and lift the debt ceiling — and then to negotiate seriously about our nation’s priorities and how we pay for them. He has refused to pay ransom to those who threaten to blow up the economy. The question now is what happens if Republicans carry out their threat and refuse? In that case, the president will have no choice. He should use his authority under the laws and Constitution of the United States to honor our commitments and pay our debts. The politicians may rage and posture, but the full faith and credit of the United States must be honored.