Understanding the Debt Ceiling Crisis and the Way to Avoid Disaster

By Bernie Sanders

No doubt you are hearing a lot of discussion about the national debt ceiling crisis. What’s going on?

Well, it appears that extreme right-wing Republicans are not only prepared to undermine American democracy by refusing to accept election results, but now they are prepared to undermine the American and global economy by defaulting on the national debt.

In a manner that is unprecedented and incredibly reckless and cruel, these Republicans have hijacked the debt ceiling process. Their position: If the Congress does not agree to impose savage cuts on the needs of working people, the elderly, the children, the sick and the poor, they will push the U.S. government to default on its debt. In other words, they are prepared to wreck our economy if they don’t get their way.

The hypocrisy of these Republicans is truly breathtaking. While they are “deeply concerned” about the deficit and national debt, they are pushing for the complete repeal of the estate tax which amounts to a $1.8 trillion tax break for a handful of multi-billionaires, a $3.5 trillion extension of Trump’s tax breaks and a massive increase in the $858 billion Pentagon budget. They would rather see children go hungry and lack health care than demand that the 1% pay their fair share of taxes.

Let’s be clear. The debt ceiling is about paying money that has already been appropriated and spent. It has nothing to do with future budgets and future spending. And throughout the history of our country, the U.S. government has always done what it is supposed to do – we pay our debts.

Over the past 63 years, the national debt limit has been raised nearly 80 times – 49 times when a Republican has been president and 29 times when a Democrat has been president. In fact, the debt ceiling was raised 18 times under President Ronald Reagan, seven times under President George W. Bush, and three times under President Donald Trump – when the national debt increased by some $8 trillion – with no strings attached. The truth is that the Bush and Trump tax cuts for the wealthy are the driving force behind the increasing debt that Republicans now claim to care about.

Defaulting on our national debt would have catastrophic consequences. Moody’s has estimated that if we do not raise the national debt ceiling, over seven million Americans could lose their jobs, the unemployment rate would climb to more than eight percent, interest rates on mortgages and credit cards would skyrocket, and Americans would lose some $10 trillion in household wealth.

On April 26th, the Republican House passed the so-called Limit, Save and Grow Act by a vote of 217-215 that would cut federal spending by nearly $5 trillion over the next decade.

Under this legislation, discretionary spending would be frozen at 2022 spending levels for next year and would only be increased by one percent for the next nine years. If Republicans stick to their pledge to exempt the Pentagon from these draconian budget cuts, spending for non-defense programs would be cut by at least 22 percent next year and up to 58 percent by the year 2033.

Here are just some of the estimated impacts of what the American people can expect:

  • Deep and sweeping budget cuts that would push 790,000 Americans out of their jobs and push our economy towards a recession.
  • Up to 21 million Americans could lose Medicaid, ripping away the healthcare they need.
  • 1.2 million women, infants and children would not receive the nutrition they need to stay healthy through the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program.
  • Nutrition services, such as Meals on Wheels, would be cut for more than 1 million low-income seniors.
  • 640,000 families would lose access to rental assistance and more than 430,000 low-income families would be evicted from Section 8 housing.
  • 200,000 children would be thrown off of Head Start and 180,000 kids would lose access to childcare.
  • 80,000 jobs would be cut at the Department of Veterans Affairs alone and millions of veterans would be forced to wait much longer for the care they need.
  • 2 million Americans would lose access to health care services through Community Health Centers.
  • 80,000 young Americans would lose their ability to attend college and Pell Grants would be slashed for 6.6 million students.

In other words, while we are experiencing more income and wealth inequality than ever before, and when 60% of our people are living paycheck to paycheck, the Republican proposal would cause massive suffering for the most vulnerable people in our country.

Further, we cannot allow these budget negotiations to allow fossil fuel companies to unleash a flood of dirty energy projects that will worsen the climate crisis. We must continue the transition from fossil fuels to clean and renewable energy if we have any chance to successfully combat climate change.

Republicans’ willingness to hold the world’s economy hostage to their draconian and cruel demands, and their refusal to consider one penny in new revenue from the wealthy and large corporations, has made it seemingly impossible to enact a bipartisan budget deal at this time.

What can President Biden do?

In my view, President Biden has the authority and the responsibility under the 14th Amendment of the Constitution to make sure that we continue to pay our bills. The language in that amendment is quite clear. It says, “The validity of the public debt of the United States … shall not be questioned.” This is a guarantee that the U.S. will always pay all its debts, period.

So today I am writing to urgently request that you join me in calling on President Biden to exercise that authority in order to protect the country from the savage Republican budget.

Is imposing the 14th Amendment a perfect solution? No, it is not. But using the 14th Amendment would allow the U.S. to continue to pay our bills on time and prevent devastating cuts to programs that help some of the most vulnerable people in this country.

If you want to sign Senator Sanders’ petition, click here.

Bernie Sanders is the third term senator from Vermont. He advocates a progressive agenda, building with citizens a movement to transform our economy to one that works for all of us and not just the one percent.

This analysis was circulated by Bernie Sanders on May 21, 2023.

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