Why both parties must make the 'painful' decision to 'eliminate the debt ceiling': NYT editorial board

05 July 2023

It has been over a month since President Joe Biden and House Republican lawmakers finally struck a deal — after weeks of discussion — to lift the debt ceiling for two more years in order to avoid a default.

In a New York Times op-ed published Wednesday, the Times' editorial board writes, although a deal has been made, it is not one that will prove to be fiscally sustainable for the country.

The board insists lawmakers must make "painful choices," one of which would be to eliminate the debt ceiling all together, and the other would be to compromise.

Otherwise, "by 2029, the government is on pace to spend more each year on interest than on national defense, according to the Congressional Budget Office," and "Over the next decade, the" CBO "projects that annual federal budget deficits will average around $2 trillion per year, adding to the $25.4 trillion in debt the government already owes to investors."

Furthermore, the board adds that since before the pandemic, when interest rates were low — "the era of low interest rates has ended," and "the cost of living on borrowed money is rising."

The board writes "A first step in resetting the conversation is to eliminate the debt ceiling before its next scheduled appearance in 2025," and also notes:

Both parties will have to compromise: Republicans must accept the necessity of collecting what the government is owed, and of imposing taxes on the wealthy. Democrats must recognize that changes to Social Security and Medicare, the major drivers of federal spending growth going forward, should be on the table. Anything less will prove fiscally unsustainable.

Additionally, noting both Biden and House Speaker Kevin McCarthy (R-California) have mentioned the need for a different debt decision, the board writes:

The talk, however, is hard to take seriously. Republicans evidently are not concerned about the debt. Every time they have had the opportunity in recent decades, they have passed tax cuts that force the government to borrow more money. They've already got a new tax cut package in their sights. Democrats, for their part, have grown wary of calls to curtail spending because predictions of dire consequences have not come to pass, and because they have learned the bitter lesson that agreeing to spending cuts simply creates room for Republicans to justify another round of tax cuts.

The board emphasizes, "Any substantive deal will eventually require a combination of increased revenue and reduced spending, not least because any politically viable deal will require a combination of those options."

The New York Times' editorial board's full op-ed is available at this link (subscription required).

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