Speaker McCarthy’s Rotten Deal
If there was ever any doubt, now we know: Speaker Kevin McCarthy has straw for brains and a Twizzlers stick for a backbone. He was within perhaps five days of breaking the iron grip of America’s fiscal doomsday machine, yet inexplicably he turned tail and threw in the towel for a mess of fiscal pottage.
We are referring, of course, to the impending moment when the US Treasury would have been forced to forgo scheduled vendor or beneficiary distributions in order to preserve incoming cash for interest payments and other priorities. That act of spending deferrals and prioritization would have obliterated the debt “default” canard once and for all, paving the way for a nascent fiscal opposition to regain control of the nation’s wretched public finances.
And there should be no doubt that we were damn close to that crystalizing moment. After all, Grandma Yellen herself forewarned just last week on Meet The Press that absent a debt ceiling increase, the Treasury Department would have to prioritize payments and leave some bills unpaid:
“And my assumption is that if the debt ceiling isn’t raised, there will be hard choices to make about what bills go unpaid,” Yellen said on NBC’s “Meet the Press…….“We have to pay interest and principle on outstanding debt. We also have obligations to seniors who count on Social Security, our military that expects pay, contractors who’ve provided services to the federal government, and some bills have to go unpaid….”
And, of course, that prioritization and deferral could have been easily done. Federal receipts are now running about $450 billion per month, meaning that after paying $61 billion of interest, $128 billion for Social Security, $26 billion for Veterans and $47 billion for military pay and O&M there would still be $188 billion left to cover at least 50% of everything else.
That is to say, no sweat with respect to servicing the public debt, and a lot of sweat among the constituencies that would have had payments delayed or reduced.
So, yes, the GOP has truly earned the Stupid Party sobriquet. No ifs, ands or buts about it.
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