Debt talks: Fiscal discipline vs. no negotiation
GOP is offering answers to how we handle our debts and the country’s economic future
Going into the debt ceiling debate, President Joe Biden was insisting on a “clean increase.” He refused to even discuss the possibility of negotiating with Republicans, insisting that they didn’t even have a plan. Part of his calculation was that House Republicans, given the lengthy floor vote for a new speaker in January, would be so divided that nothing could pass the House.
However, Republicans did come up with a plan and successfully passed it — with no Democratic support.
That vote significantly changed the strategic situation for both Republicans and the White House. In the Winston Group’s latest “Winning the Issues” survey (conducted April 28-30), 48 percent of voters said they believed the president should negotiate with congressional leaders, while only 14 percent supported the president refusing to negotiate and insisting instead on a “clean increase” without conditions. Another 25 percent took the position that the president should negotiate only after congressional leaders have put forward their plan.
Prior to the House vote, that 25 percent of voters were more aligned with a clean increase because there was no alternative. But by passing the bill, Republicans addressed that concern and have now gotten these voters what they wanted and what Biden demanded: a plan. With that plan passed by the House, they are now going to turn to Biden to negotiate with Republicans. The issue of fiscal discipline now has a seat at the negotiating table.
In this debt ceiling debate, there has been an important shift in the electorate’s view on the impact of the national debt. The debt ceiling has generally been an abstract issue for most voters, defined by incomprehensible budget numbers and little clarity on the impact of the debt ceiling on the average American. That has changed as a result of Biden’s economic policies that have produced the worst inflation in 40 years.
Voters have crossed a major attitudinal threshold and now believe increasing federal spending contributes to inflation by a 64 percent to 21 percent margin. They also believe, 55 percent to 26 percent, that increasing the national debt contributes to inflation. So, perhaps for the first time, the national debt has a connection to the top economic issue impacting families as they deal with high gas and food prices.
The idea of just simply increasing the debt ceiling is not enough. Some fiscal discipline is needed to address spending that two-thirds of the country believes is contributing to inflation.
However, at the same time, voters worry about what happens if the debt ceiling is not raised. They believe by a 57 percent to 23 percent margin that if Congress refuses to give the United States the ability to pay its bills on time, the consequences for the economy could be catastrophic.
So the electorate is looking for both an increase in the debt ceiling and fiscal policy that will help pare inflation. At this point, only the Republican House bill offers a compromise that addresses both concerns, given Biden’s unwillingness to negotiate.
The survey found that the GOP debt ceiling legislation as passed was favored by 52 percent of voters and opposed by 29 percent. Republicans supported the bill 66 percent to 19 percent and independents by a narrower 43 percent to 30 percent margin. Another 27 percent fell into the “don’t know” category. This is a positive starting point for the bill, but it is also just the beginning of the discussion, as Democrats are trying to define the bill on their terms.
House Republicans went into their first real meeting with the president and Democratic Hill leaders Tuesday with at least a slight advantage and two important dynamics in play. First, Republicans hold an 11-point advantage in voter confidence over Democrats when it comes to the handling of national debt: 46 percent to 35 percent; a 16-point advantage on handling inflation: 49 percent to 33 percent; and an 11-point lead on handling the economy: 48 percent to 37 percent.
Second, Biden’s economic numbers are in bad shape. His economic job approval is 37 percent to 54 percent (approve-disapprove), and among independents it is 24 percent to 62 percent (approve-disapprove). Additionally, his economic policies are seen as incorrect more than correct by a margin of 32 percent to 51 percent (correct-incorrect).
This has led voters to associate government policies under President Biden and congressional Democrats with inflation and price increases, as more than half the electorate believes government policies, under President Biden and Democrats in Congress, have caused inflation to increase and prices to go up: 54 percent to 33 percent (believe-do not believe).
Voters’ attitude about the economy continues to sour, with only 29 percent saying it is heading in the right direction and 59 percent saying it is on the wrong track. Contrary to Biden’s claims, 61 percent think inflation is getting worse. This last point is important, as voters want to see some fiscal discipline to slow down inflation.
What the president and Hill Democrats ignore is the fact that the debt ceiling debate this year is fundamentally about fiscal discipline — exactly what McCarthy and other Republican leaders are trying to interject into both the debt ceiling negotiations and the budget process.
When Biden normalized the 2020 COVID-19 emergency budget as his baseline, he walked away from fiscal discipline. He ignored CBO projections of trillion-dollar deficits for the near term and, after 2029, multitrillion-dollar deficits. This president has disregarded what has become an unsustainable debt that threatens both our economic and national security.
Perhaps he should listen to his own words during the 2006 debt ceiling battle to understand why Republicans have drawn a line. Back then he said, “Because this massive accumulation of debt was predicted, because it was foreseeable, because it was unnecessary, because it was the result of willful and reckless disregard for the warnings that were given and for the fundamentals of economic management, I am voting against the debt limit increase.”
Biden underestimated House Republican leaders’ ability to unify their conference and actually pass an increase in the debt ceiling — a major miscalculation leading to one big question: Could Senate Majority Leader Charles E. Schumer pass a clean debt ceiling bill?
The House Republican Conference is looking ahead. They are offering answers to how we manage not just our debts but also the country’s economic future. Biden’s focus solely is on bills due; Republicans are looking ahead to what’s going to come due in the future if we don’t put the brakes on Biden’s inflationary spending.
David Winston is the president of The Winston Group and a longtime adviser to congressional Republicans. He previously served as the director of planning for Speaker Newt Gingrich. He advises Fortune 100 companies, foundations, and nonprofit organizations on strategic planning and public policy issues, as well as serving as an election analyst for CBS News.