For months, the Republican-imposed debt ceiling crisis was generally perceived as an abstraction. Observers from the political and economic worlds understood that GOP leaders were making serious threats, and that policymakers would need to come up with a solution to prevent a catastrophe, but the issue was largely seen as a problem on the horizon.
The horizon is suddenly drawing closer now.
After House Speaker Kevin McCarthy signaled to Wall Street that he and his party are moving forward with their hostage crisis, Reuters reported late last week that the GOP-imposed standoff was starting to send “jitters through global financial markets.” The report added the cost of insuring U.S. debt has now reached its highest level in over a decade, and JPMorgan warned of a “non-trivial risk” of a default.
In other words, this is no longer an abstraction. It’s late April; the deadline might hit in early June; and we’re already seeing some of the effects of Republicans threatening to harm Americans on purpose.
To that end, McCarthy unveiled something called the Limit, Save, Grow Act of 2023 last week — a package that came together in secret, without so much as a single committee hearing — which is intended to serve as the GOP’s hostage note. It is a difficult plan to take seriously: In order to prevent Republicans from deliberately crashing the economy, Democrats are apparently supposed to accept a plan that would put 10 million Americans at risk of losing the Medicaid coverage, undermine law enforcement in a way that would increase the deficit, and gut necessary public investments.
Republican Rep. Matt Gaetz told Politico, “The leadership just picked up the House Freedom Caucus plan and helped us convert it into the legislative text.” The far-right Floridian apparently meant that as a compliment.
What’s more, in exchange for paying this ransom, Republicans would raise the debt limit through March 2024, at which point the party would presumably come up with…
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