Can the debt-ceiling deal hold?
ANY JOURNALIST, save this one, could tell you: a little deadline pressure can be helpful. But this principle can, like most, be taken to insanity. Consider the pathological case of Congress under divided government, which often functions by wiring time bombs and sitting idly by until the countdown ticks close to zero. The present showdown over the debt ceiling, a statutory limit on the amount of money the Treasury can borrow, illustrates this worryingly well.
After the federal government hit its limit of $31.4trn in January, the Treasury entered into a number of “extraordinary measures” (which, despite the name, are now routine) meant to avoid a sovereign default. Republicans led by Kevin McCarthy (pictured), the speaker of the House of Representatives, promised to withhold the votes necessary to increase the limit unless the White House accepted budgetary concessions. For months the position of President Joe Biden was, in essence, to refuse to negotiate with economic terrorists. But as the “X-date”—the drop-dead day when the accounting tricks ran out—of early June approached, Mr Biden began bartering. The two sides announced a compromise deal over the weekend, leaving just enough time for Congress to pass it. But it will still take days of delicate work before the bomb can be defused.
The trickiest moment is expected tonight, when Mr McCarthy brings the deal up for a vote in the House. He faces a brewing rebellion within his own caucus of hardline members who believe that he scored an insufficiently favourable deal with the White House. Mr McCarthy had a tortured route to power, having to endure a humiliating series of 15 votes in January, when hardliners demanded concessions in exchange for his accession. One of those concessions was a pledge to push an austere line in the debt-ceiling negotiations.
2023-05-31 07:13:05
Article from www.economist.com
