It’s Time To Discuss The Real Stakes Of Negotiating The Debt Ceiling

The Biden Administration has to choose; are they going to attempt to negotiate with Kevin McCarthy’s House Republican Caucus, or are they going to end the unconstitutional farce of the debt ceiling once and for all by challenging its legality under the 14th Amendment to the Constitution? Biden has given no indication that he will take the second option despite pressure from even moderate members of his party to do so (Crooked Media did a good explainer on why any negotiation is a failure). Progressive groups are preparing for the worst, defending their chosen priorities from the negotiator’s chopping block as a result. 

There is one under-discussed major issue with conceding to fighting on Republicans’ terms, and haggle over which programs will get cut — every part of the Democratic electorate is reliant on a functioning government staffed by competent professionals. McCarthy’s conservative members of Congress are not (or at least, pretend not to be). Republicans are happy to let all government agencies except the Department of Defense atrophy into nothing. 

If left-leaning groups begin to fight over which of their programs will be saved from cuts, the Republicans have already won the long-term battle within the media and Biden Administration capitulation becomes inevitable. The debate over which programs Democrats must protect in debt ceiling debates accepts the premise that to protect social safety net programs, the agencies that implement them must be gutted. Progressives need to rebuke this mindset. 

Progressives must also push back against media explainers that list the cuts government agencies will face without explaining what these cuts will mean. Without bureaucrats to administer, the programs Democrats have fought so hard to protect, they are destined to erode and, eventually, fail. You would think that members of the media assigned to explain the policy stakes of legislation would at least nod their hand in the direction of understanding that — but, sadly, you would be wrong.

Republicans have made systematically underfunding government programs a hallmark of their policymaking since the Reagan Administration. Cuts to agency staffing often fly under the radar when they first occur, only attracting attention when the starved agency is unable to cope with its obligations. Why? Because the media isn’t inclined to care about how the executive branch does or does not operate, and too few figures progressive institutions bother to explain reality to the media and attack them when they don’t listen.

We’ve written about the issue of government capacity a great deal at the Revolving Door Project, and how its erosion not only undermines trust in government but radically undermines the effectiveness of government programs. Last year’s airline delays were partly caused by the FAA’s decades-long underfunding. Similarly, antitrust enforcers, civil rights enforcement, and employee protection agencies have been systematically whittled down until they cannot carry out their missions. This is perfect for Republicans as it reinforces the idea that government is inefficient, it limits government regulation in effect if not in law, and it paves the way for the privatization of publicly-run programs under the guise of bureaucratic inefficiency. 

More than just demanding across-the-board cuts to government spending, McCarthy is also demanding that Biden agree to work requirements for TANF, SNAP, and Medicaid (programs that help poor families with children, provide food assistance, and offer medical insurance for low-income people respectively.) Work requirements are a tried and true method to kill social services — they burden applicants with confusing paperwork, they provide an excuse to throw beneficiaries off of programs and they sink the agency administering the benefit under the weight of the paperwork. If Democrats give in on McCarthy’s work requirement demands they not only will be abandoning millions of low-income Americans struggling to afford food and medical care, but they will be causing lasting damage to the agencies that administer these programs.

Media coverage of work requirements is often terrible, failing to discuss the harm they cause, but they also fail to discuss how work requirements make the government less efficient, not more. Instead of limiting funds to those “deserving” of public benefits as the proponents of work requirements claim, work requirements cause the government to devote vastly more resources to administering benefit programs. Adding the increased administrative costs to agencies facing a budget cut means they will be forced closer to the breaking point, deteriorating government services. Republicans know work requirements don’t result in higher employment rates. They understand it means throwing poor people out of public benefit programs and causing government inefficiency — and that’s exactly what they’re after. 

Perhaps nowhere can this playbook be seen more clearly than the IRS. Last year the IRS had an appalling tax season that was marked by countless articles about the impossible delays on tax refunds, the interminable wait to speak to someone at the agency and the agency’s failure to audit high-net-worth individuals. This is even more important to those looking to implement social safety net programs as the IRS has become Democrats’ favorite means of passing cash to families. The IRS was responsible for distributing Covid-19 stimulus checks and is the agency responsible for passing along the Earned Income Tax Credit — Beltway Democrats’ favorite benefit program. At the same time, the IRS became a means of distributing money to lower and middle-income Americans, Republicans systematically worked to underfund the agency (making it unresponsive to questions) and to complicate the filing process. This not only made filing taxes more difficult than it had to be, but it also allowed tax preparation companies to swallow between 13 to 22% of the entire program’s benefits. 

The Republican playbook here worked — by starving the IRS, they helped turn the EITC into an inefficient program. But unlike other instances of agency starvation, Democrats heavily invested in the IRS when passing the Inflation Reduction Act last summer. Ignoring Republicans claiming that the IRS would soon be kicking down the door to every American in some tax agency reign of terror, the Democrats allowed the IRS to plan on hiring 20,000 additional staff over two years, and the benefits can already be seen this tax season. The average wait time for those calling the IRS fell by 85% from 27 minutes last year to 4 minutes this year and cleared the backlog of 2022 tax returns all while implementing significant technological improvements. Along with these improvements, the IRS has announced it plans to launch a free online tax filing tool. 

The IRS investment is a rousing success, proof that hiring more people and investing in government agencies can result in massive public benefits. Democrats should learn from their achievement, not let it stand alone as proof of what could have been. If they give in to McCathy’s demands to starve government agencies of personnel and funds all whilst implementing new administrative burdens, the government structure that implements critical programs will crumble. 

Democrats need to end their policy-based infighting and unify behind ending the debt ceiling via the 14th Amendment, the trilemma, or any of a number of other good options. We need a well-funded, staffed and trained government to implement the social programs Democrats have fought so hard to implement–and popular, longstanding laws that even Republicans won’t take head-on, like the Clean Air Act and protecting against wage theft. If we want to protect these programs into the future, we cannot allow Republicans to hack away the agencies which implement them.

And it might make things easier if these stakes were ever explained to voters by the traditional media.