Finger-Pointing Won’t Save Anyone if Default Leads to Economic Collapse
Is it the Biden default? Or the Republican Default on America?
Even as negotiators push forward with halting talks to resolve the federal debt-ceiling standoff, members of both parties are positioning themselves to try to dodge the blame for the economic fallout if things go south. Democrats lambaste Republicans for taking the debt ceiling hostage to appease “extreme MAGA.” Conservatives bent on shrinking government spending. Republicans hit Democrats for waiting too long to open talks and not taking GOP demands seriously.
But deep down — and in some cases not so deep — officials in both parties know they are all going to pay if they don’t get a deal, the government defaults and Americans lose money and jobs and confidence about their financial well-being and future.
“I would hate to be the politician trying to explain to people when the economy is in the toilet that it’s not my fault, it’s their fault,” said Senator Lindsey Graham, Republican of South Carolina. “Yeah, that ain’t going to work. They will flush us all.
Polls have suggested Mr. Graham’s view is correct. A Washington Post-ABC News Poll released earlier this month shows that the public is divided about who will bear the blame, with a significant chunk of independents saying the two sides should share it equally.
And some on Capitol Hill say the political backlash will be well deserved if Congress and the White House manage to mangle the situation so badly that public officials careen into a completely avoidable crisis and send both the economy and the retirement accounts of millions of Americans reeling.
“I can’t comprehend that anyone who had the ability to prevent this much damage to our country, our economy and our world standing would allow that to happen,” said Senator Joe Manchin III, Democrat of West Virginia, who had been among those pressing his party to engage in negotiations earlier. “It would be absolutely reprehensible. Everyone should get hammered.
But those likely reverberations haven’t yet motivated negotiators to come to an agreement and clear the way for an economic sigh of relief. Representative Garret Graves of Louisiana, the point man for House Republicans in the talks, abruptly exited a Friday negotiating session with administration representatives in the Capitol, accusing them of being “unreasonable,” and the talks were temporarily suspended. Suddenly, the path to a quick agreement that Speaker Kevin McCarthy had seen on Thursday was newly cluttered with obstacles.
Such ups and downs in budget negotiations are fairly standard and can be performative as well as substantive. Both sides need to flex to show their respective forces that they are hanging tough and pushing for all they can get. But there are real differences in the positions of Democrats and Republicans on a host of issues at the bargaining table. A positive outcome is no certainty, despite regular high-level assurances that the United States cannot and will not default in the coming days.
Still, should that occur, lawmakers and administration officials would like you to know that they didn’t do it.
“Here we are on the brink of a Biden default,” Senator Shelley Moore Capito, Republican of West Virginia, declared this week both in person and via news release, sounding a refrain becoming increasingly popular with Republicans — that this was all Mr. Biden’s doing because he refused to engage with them earlier and allow enough time to work out an agreement.
Not so, counter the Democrats. “We find ourselves in the midst of a GOP-manufactured default crisis because House Republicans have chosen to try and hold our economy, our small businesses, everyday Americans hostage to unreasonable ransom demands,” Representative Hakeem Jeffries, Democrat of New York and the minority the leader said.
Republicans have a retort. They argue that since they squeezed legislation through the House last month that would raise the debt limit and enact spending cuts, they have bragging rights as well as immunity from any criticism because they are the only ones who have acted thus far — though it was widely known the bill could never pass the Democratic-majority Senate.
“I don’t know how we would own it if we raised the debt limit,” Mr. McCarthy said at the White House when asked if he was prepared to face the consequences for a default. His colleagues share his view.
“In my district I don’t think it would be a huge problem,” said Representative Tom Cole, Republican of Oklahoma. “I did vote to raise the debt ceiling. Show me one person on the other side who did.”
In addition, Republicans know it is traditionally the president who gets credit or fault for the state of the economy even if circumstances are well beyond the control of the executive branch.
Democrats scoff at the Republican claims. Senator Chuck Schumer, the New York Democrat and majority leader, dubbed the House legislation the Default on America Act, to try to capture both its impact and its dead-on-arrival status in the Senate. He and his fellow Democrats say they refuse to reward Republicans for what they view as highly irresponsible actions that are putting the nation’s economy at risk — even though both parties have used the debt limit for bargaining leverage over the years.
“From the beginning, Democrats have said — I have said — that this process demands bipartisanship,” Mr. Schumer said this week. “It’s how we avoided default under President Trump. It’s how we have avoided default under President Biden, and it’s how we should avoid default this time too. Brinkmanship, hiding plans, hostage-taking — none of that will move us closer to a solution.”
The two parties can continue to trade shots. But until they trade negotiating positions they can come to terms on, the threat of default hangs over Washington and the nation. And if that happens, those involved may find that the public won’t distinguish between who did or said what when, but will hold them all accountable.