Barely Speaker Kevin McCarthy spoke at the New York Stock Exchange Monday, attempting to convince Wall Street that if the nation defaults on its debts in a few months and causes a global financial crisis, it’s all going to be President Joe Biden’s fault. That’s a tough sell since it’s been McCarthy’s GOP that has been arguing for months that a default could be managed by the Treasury Department while they flailed around unable to come up with a plan of their own.
“He’s probably trying to reassure investors and Wall Street … that Congress is capable of doing something, and we’re going to do something,” Rep. Steve Womack told The Washington Post, calling it a “test” for McCarthy. He added that the “real problem” is whether McCarthy can find 218 votes among the GOP to pass any kind of bill, much less a plan to present to the White House.
One thing McCarthy apparently wants is to make people go hungry. A centerpiece to the budget-cutting message he took to Wall Street is steep cuts to food assistance programs. That’s getting a tepid response from Republicans in the Senate (where it’s not going to pass). One GOP Senate aide scoffed “I mean, Godspeed. Get what you can. We’re going to live in reality over here.”
Arkansas GOP Sen. John Boozman reiterated that reality, saying it “would be difficult to pass in the Senate with 60 votes.” He’s doubtful it would even get 218 in the House GOP. “You look at the margin in the House,” he said, “It might be difficult to pass it in the House.”
McCarthy has four votes to spare, and plenty of his members have constituents among the 41 million low-income Americans who get Supplemental Nutrition Assistance Program help. That includes a bunch of swing-state Republicans, including a new group of freshmen members from New York.
That’s just one aspect of the massive cuts McCarthy would have to pass to achieve the kind of spending reductions he’s talking about–cuts that he’s going to find impossible to find 218 votes for.
That’s just one reason he has no plan, as Biden was quick to point out. “Show me his budget,” Biden told reporters early Sunday morning, on his return from his trip to Ireland. Biden released his budget on March 9. McCarthy has released nothing. Not even an agreed upon outline for the cuts he’s demanding.
"I don't know what we're negotiating if I don't know what they want, what they're going to do,” Biden stressed.
That’s one reason the White House is as adamant as it is in arguing that the only option is a clean debt ceiling that is separate from budget negotiations. They can count to 218, even if McCarthy can’t. They can also point to plenty of evidence that just one side of this argument thinks that breaching the debt limit isn’t such a big deal.
Andrew Bates, a spokesman for the White House, responded to the latest from McCarthy in a statement reflecting that. The House should “immediately take a default on our obligations–which would worsen the fiscal outlook–off the table.”
“House Republicans must address the debt limit; that’s their non-negotiable obligation under the Constitution,” Bates said.
House Republicans have spent more time putting together an inoperable plan for what the Treasury Department could do after a default rather than putting together any kind of budget to take to Biden to begin a real negotiating process. Taking the nation into default has actually become a thing that some Republicans think should happen. For real.
“My view is that the crisis at hand is the debt; it’s not that we might not pass the debt ceiling,” said Stephen Moore, a leading economist at the right-leaning Heritage Foundation. “It’s that we can’t just stay on this path. There will be a financial train wreck.”
Meanwhile, on Wall Street, real economists’ hair is on fire. “It will be financial chaos,” said Mark Zandi, the chief economist at Moody’s Analytics, if the nation even comes close to default. “Our fiscal problems will be meaningfully worse. … Our geopolitical standing in the world will be undermined.”
Reprinted with permission from Daily Kos.