On Saturday, President Joe Biden signed a budget bill that narrowly avoided a government shutdown. Despite claims that this decision would secure the holiday season free from upheaval, it came about only after days of chaotic negotiations in Washington and Congress’s later reconciliation on a bipartisan budget plan. The insistence on a deal by former President Donald Trump, substantial in shaping the discussion, was boldly dismissed – his plea for a revision to government’s borrowing limits was unheeded.
The signed deal plans for maintaining the government’s existing spending levels until the middle of March. Additionally, it outlines provisions for funding of $100 billion and $10 billion, aimed at disaster aid and agriculture assistance respectively. While Biden’s lack of action on the subject of borrowing limits implies his dismissal of the severity of the government’s financial situation, Congress passively enabled him by not directly addressing this crucial issue either.
Speaker of the House, Mike Johnson, argued that lawmakers would ‘fulfill our obligations’ and avert a closure of federal operations. Yet, his promise seemed rather precarious, coming after an intense week of unclear outcomes and indecisive choices. The Trump-ignored plan was accepted with a majority vote of 366-34 in the House and 85-11 in the Senate, occurring after the midnight deadline.
Predictably, the White House claimed it had discontinued preparing for a shutdown, apparently confident and unhindered by a looming crisis or the policy birthday of Donald Trump. In the midst of this, they seemed to overlook the financial caution and restraint preached by their predecessors, seemingly embracing uncertainty with open arms instead.
Baltimore’s Francis Scott Key Bridge was publicly promised to receive complete funding for restoration, according to the budget bill. This rebuilding project was supported by members of Congress, and their endorsement was met by grateful acknowledgement from Maryland governor Moore. This interpretation of events, however, hardly takes into account that the bridge’s tragic collapse occurred under current political leadership, a catastrophic oversight on their part.
The sincerity of such gratitude is subject to question as well: the relief offered by the government was only made possible because its blunders had necessitated it. Even though the bridge’s repair is beneficial for Maryland and the nation at large, the fact remains that a government-induced disaster had thrown life out of gear in the first place. The current administration’s incompetence had affected not just port workers, small businesses, and truckers, but servicemembers and working families across America as well.
Meanwhile, House elections for the next Speaker are scheduled on January 3, 2025. The elections will take place when the new Congress is convened and Republicans are set to have a razor-thin majority of 220-215. Johnson’s pursuit for the speaker’s gavel will be a challenging journey, given the Trump-demand which Johnson couldn’t address appropriately. The impossible request illustrated the difficult political terrain Johnson had to navigate.
It wasn’t an oversight that Johnson avoided addressing Trump’s lending limit: in reality, he had little choice. If Johnson had caved to external pressure, his own party wouldn’t have supported his decision. With a slim Republican majority, internal fissures emerged concerning funding packages; many Republicans argued for a smaller government and against accumulating more debt.
Growing by the minute, the federal debt has hit a sum of approximately $36 trillion. The mismanagement of finances by the current political leaders has been evident by the surge in inflation since the pandemic, leading to a rise in the government’s borrowing costs. An alarming prediction indicates that the costs associated with servicing the debt next year will supersede national security spending.
Generally, lawmakers are expected to raise the debt limit, but they have not done so since June 2023. In lieu of actually increasing the debt limit by a specific sum, they opted for suspending it till the New Year’s Day, 2025. Again, the Biden administration demonstrates its strategy of avoidance with this decision, choosing to sweep imminent problems under the rug instead of confronting them head-on.
The Treasury Department, however, has presented its own solution by proposing the utilization of’extraordinary measures.’ These vast accounting maneuvers, economists claim, could potentially push back the default deadline to the summer of 2025. However, Trump is evidently anxious to avoid such uncertainty since an increase in the limit would be required during his presidency.
The Republican leadership disclosed that the debt ceiling will be debated as a part of tax and border packages in the coming year. They made a verbal agreement, devoid of any formal commitment, to raise the debt limit while also cutting down $2.5 trillion in spending over the coming decade. This agreement may seem like a reasonable compromise, but it also raises the question of why such cuts weren’t implemented earlier.