Debt Ceiling Poses Major Test For McCarthy's Tiny Majority

The debt ceiling is the congressionally imposed limit on how much the government can borrow to continue to pay the bills for money Congress has already appropriated. Those debts include paying for people in the military, Social Security and other federal pensions, and payments on foreign debt. The federal government needs to borrow money to pay its bills when its ongoing operations can’t be funded by tax and other federal revenues alone. The U.S. paying its bills—and making the payments on the debt it owes overseas—is essential.

McCarthy’s plan is the same as the one the Freedom Caucus put forward in March: Biden has to erase all the accomplishments of the past two years. As White House spokesman Andrew Bates told RealClearPolitics, “Their leadership has caved to the most extreme MAGA hardliners in their conference.”

Despite that, some of the maniacs are still holding out on McCarthy. Rep. Andy Biggs of Arizona says he’s “leaning no” on the bill because it would raise the debt ceiling by $1.5 trillion. Florida’s Rep. Matt Gaetz doesn’t think it punishes low-income working Americans enough. It should have “more rigor” on work requirements for recipients of Medicaid and other programs, he says, making them prove that they work 30 hours a week instead of 20 as is currently in the bill.

The MAGA team holding out on their votes should be giving the so-called moderates the opening they need to show they care more about responsibly governing the country rather than appeasing the extremists. They could, but they’re not.

Like Nebraska’s Don Bacon, the “center-right” guy the traditional media runs to for quotes. He’s completely on board. The “goal is to get this on the floor next week,” he told NBC last week. “[McCarthy’s] providing a simple plan. I think it’s good policy. I think the American people are gonna like it,” said Bacon.

That doesn’t seem likely, given the majority of American people don’t think games should be played with the debt ceiling. Republicans, however, are used to ignoring popular sentiment.

South Dakota Rep. Dusty Johnson chairs the Main Street Caucus, supposedly a moderate, business-friendly bunch. He’s on board with McCarthy’s plan to pass the bill “before the end of April,” and is bullish on the bill. “Kevin McCarthy’s gonna get 218 votes on this deal,” he told NBC. “These are really concepts that, I think, unify the conference rather than divide us.”

They’re generally not used to ignoring Wall Street, though, and Wall Street is getting increasingly jittery. They’re not raising hell about it yet, but they’re nervous. Last week, BlackRock Vice Chair Philipp Hildebrand warned that default would undermine “a basic anchor” of the world’s financial system and “must not happen.”

“All we can do is to pray that everyone in the United States understands how important the sanctity of the sovereign signature of the leading currency, of the leading bond market, of the leading economy in the world is,” Hildebrand said.

Of course they can do more than send thoughts and prayers. They can use their massive leverage—and campaign money—on Republicans, starting with the so-called moderates. Those guys might not listen to their constituents, but they will listen to their funders.