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Now or Later?




 

Here we find ourselves, right in the midst of a classic debt ceiling standoff. Everyone is shifting uneasily as President Joe Biden sets a firm boundary - no alterations to the Inflation Reduction Act. That's right. The Act that was ushered through solely by Democrats is his line in the sand. According to the Washington Examiner, this has been communicated during quiet negotiations between Biden's team and Republican leaders, including House Speaker Kevin McCarthy.


Inside the Inflation Reduction Act is the plan to expand the IRS significantly, with an addition of more than 80,000 agents costing around $80 billion. About $10 billion of this has already been spent. The Republicans, however, have put their foot down. They've passed a bill to eliminate the remaining $70 billion, and coincidentally, their line in the sand matches Biden's precisely.


This situation brings to mind the Obamacare saga. Democrats pushed through a monumental piece of legislation that had little public approval, didn't function well, and was unaffordable. Voters then elected Republicans with the expectation that they would dismantle it. But now, Biden expects Republicans to fund the very legislation they were voted in to oppose. This is certainly a curious turn of events.


This funding predicament echoes back to the era of McConnell, Boehner, and Paul Ryan when Republicans consistently funded Democrat-passed laws, which is not what the voters put them there to do. This is a far cry from the intentions of our founding fathers, who believed that if one party passes a law and the next party opposes it, that law should be discarded.


So, the House Republicans and Biden find themselves at an impasse, their lines in the sand perfectly aligned. There's talk of some short-term compromises to keep things moving, but it's highly unlikely that Republicans will agree to raise the debt ceiling without significant alterations to the Inflation Reduction Act.


Kevin McCarthy is a seasoned politician. He knows better than to ask his caucus to fund the very legislation they pledged to repeal. And he understands that if he attempts to pass this on the floor with Democrat votes, he would be done as Speaker of the House almost immediately.


Some conservative House members, particularly those from staunchly Republican districts, have already taken a risk by voting to raise the debt ceiling. They could stomach that decision because they were still upholding their promises to halt the IRS expansion. But funding the Inflation Reduction Act? That's a compromise they can't afford to make. It would jeopardize their standing in their home districts.



So, what's the future hold? As Trump noted, we can default now or default later. It seems we might be bracing for a default sooner rather than later. So, prepare for a bumpy ride. And as always, remember to take it easy.


 


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