House Speaker Kevin McCarthy went to New York on Monday to seek Wall Street’s support for his pursuit of a debt-ceiling deal tied to federal spending cuts. But financial industry pros know that attaching any strings to an increase in the borrowing limit is irresponsible. They should tell the speaker that they would be glad to support many Republican budget priorities later this year — but first, Republicans should accept an increase in the debt limit, without conditions, because that’s the only sure way to avoid the dire consequences of a default.
To allow the US government to continue paying its bills, Congress must pass a measure to raise the federal borrowing limit. That means Republicans and Democrats need to come to some sort of agreement. In a speech Monday at the New York Stock Exchange, McCarthy outlined demands including new restrictions on Medicaid benefits and other limits to federal spending. He also tried, unreasonably, to shift the blame for the looming disaster to President Joe Biden and the Democrats. (1)
Democrats aren’t going to agree to McCarthy’s harsh demands. Biden has said that he wants to raise the borrowing limit without conditions. Yet McCarthy seems determined to put his energy into a probably doomed attempt to unify his dysfunctional party and shore up his standing as House speaker.
