How Biden lost
Almost no other country in the world has a debt ceiling. Legislators elsewhere see it as redundant. Politicians can argue about taxes and spending when writing budgets, but once they pass those budgets they don’t debate whether to pay their country’s bills.
If you think of it in terms of a family budget, you can see why the rest of the world scoffs at the idea. A family should have a serious discussion over whether it can afford a new car or house. But once it has bought the car or house, there isn’t much point in arguing over whether to pay the bill. Reneging on it will only worsen the family’s finances.
This background helps explain why Biden and his aides insisted — publicly and privately — that they would not negotiate over increasing the debt ceiling. Doing so, they explained, would encourage future ransom demands when the country again approached its debt limit. Congress should pass a straightforward increase to the limit, White House officials said, and Biden would then be happy to negotiate over the federal budget.
Instead, they abandoned this position and started negotiating with Republicans over the debt ceiling.
To be fair, Biden may not have had a choice. Had he refused to negotiate, a financial crisis could have ensued, and Biden might have taken the blame. But his surrender shows that Democrats (and the country) would benefit from a longer-term solution to the debt ceiling. As long as it exists, it will create economic uncertainty and give Republicans an extra opportunity to cut spending.
There is a straightforward solution, too. At any point, Congress could repeal the debt ceiling or raise it so high that it would be irrelevant for decades.
Some Democrats, including both progressives like Senator Elizabeth Warren and moderates like Senator Michael Bennet, favor this approach and pushed for it when their party controlled Congress early in Biden’s presidency. But other moderates, led by Senator Joe Manchin, blocked it, apparently out of a desire to show concern about the deficit. (Again, the debt ceiling isn’t actually fostering long-term deficit solutions, as Ezra Klein explains.)
