The world is looking for American leadership, Hillary Clinton writes. And “congressional brinkmanship on the debt ceiling sends the opposite message to our allies and our adversaries: that America is divided, distracted and can’t be counted on.”
Whatever might be said about the latter two ideas (distracted, unreliable), the first — that “America is divided” — may not be desirable, but it is inarguable. Except, ironically, where the debt ceiling is concerned: No reasonable legislator, including House Speaker Kevin McCarthy and President Biden, believes it is in America’s interest to default on the debt.
It’s one rare point of solid bipartisan agreement, yet the temptation to try to win spending concessions in a power play has proven too great to resist for the Speaker. Clinton says McCarthy is “making a ransom demand.” McCarthy keeps saying he is being responsible, like a good parent.
Speaker of the House Kevin McCarthy is making a ransom demand. His hostage is the economy and America’s credibility.— Hillary Clinton (@HillaryClinton) April 24, 2023
Read my view of the debt ceiling debate at @nytopinion:https://t.co/N2qqYKz3Hw
Responsibility, evidently, is in the eye of the beholder. Clinton’s New York Times op-ed slams McCarthy‘s debt ceiling game of chicken with the Biden administration. Clinton calls out McCarthy’s posturing as potentially devastating to the global economy, and says his conflation of spending reductions and budget plans with money already spent (the debt) is disingenuous.
The former Secretary of State’s relates how the last time Republicans threatened a Democratic president — Barack Obama — with similar debt ceiling shenanigans, she was smirked at by her counterpart in China who was, she writes, “barely containing his glee at our self-inflicted wound.”
Clinton writes how the brinkmanship then was resolved, but not before the U.S. government’s credit rating was downgraded and the S&P index fell 17% on fears of an American debt default. Brinksmanship has another consequence, too: It feeds the “autocrats’ narrative that American democracy is in terminal decline and can’t be trusted.”
Those autocrats? The leaders of China and Russia, for starters.
“By undermining America’s credibility and the pre-eminence of the dollar,” Clinton writes, “the fight over the debt ceiling plays right into the hands of Xi Jinping of China and Vladimir Putin of Russia.” McCarthy is a puppet of Putin, as Clinton portrays it, even if the Speaker is doing Putin favors unwittingly.
China, too, benefits from McCarthy’s stonewalling, Clinton asserts. Xi Jinping is probably also “barely containing his glee at our self-inflicted wound” — just as the Chinese did last time this happened.
To get out in front of accusations of partisanship, Clinton links to the Treasury Department study on the Macroeconomic Effect of Debt Ceiling Brinkmanship. The study shows the brutal effects of merely the threat of a default. During the debt limit debate of 2011, between the second and third quarter, “U.S. household wealth fell $2.4 trillion.”