President Joe Biden and House Speaker Kevin McCarthy are urging lawmakers to support a deal to suspend the debt ceiling until January 1, 2025, in order to prevent the United States from defaulting on its debt for the first time in history. The two leaders reached a tentative agreement over the Memorial Day long weekend, but it must still be approved by Congress before a June 5 deadline, when the government is expected to run out of money to pay its bills. Both progressive lawmakers and members of the far-right House Freedom Caucus have expressed some opposition to the deal, which calls for nondefense discretionary spending to remain mostly flat while boosting military spending by about 3%. New work requirements would be established for some recipients of federal aid programs, and it cuts funding to the IRS and lifts a moratorium on student loan payments in place since the pandemic. The deal also speeds up the approval and construction of the proposed $6.6 billion Mountain Valley Pipeline in Virginia and West Virginia. We speak with Lindsay Owens, executive director of the Groundwork Collaborative and a former policy adviser to Senator Elizabeth Warren.
AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman.
President Joe Biden and House Speaker Kevin McCarthy are urging lawmakers to support a deal to suspend the debt ceiling until January 1st, 2025, in order to prevent the United States from defaulting on its debt for the first time in history. A tentative deal has been reached, but it must still be approved by members of Congress, where progressive lawmakers and members of the far-right House Freedom Caucus have expressed opposition to parts of the deal. President Biden announced the agreement Saturday.
PRESIDENT JOE BIDEN: And this is a deal that’s good news, I believe you’ll see, for the American people. The agreement prevents the worst possible crisis: a default for the first time in our nation’s history — an economic recession, retirement accounts devastated, millions of jobs lost. It also protects key priorities and accomplishments and values that congressional Democrats and I have fought long for, long and hard for.
AMY GOODMAN: House Speaker Kevin McCarthy praised the deal, which places new caps on government spending.
SPEAKER KEVIN McCARTHY: We were able to do this when the president said he wasn’t even going to talk to us. This is really a step in the right direction. It puts us a trajectory that’s different. We put a statutory cap on only spending 1% for the next six years. So we let government grow, but at a slower rate.
AMY GOODMAN: The deal calls for nondefense discretionary spending to remain mostly flat, while boosting military spending by about 3%. New work requirements would be established for some recipients of food stamps and the Temporary Aid for Needy Families program. And it cuts funding to the IRS. In addition, the deal would also lift a moratorium on student loan payments which has been place since the pandemic.
The deal also speeds up the approval and construction of the proposed $6.6 billion Mountain Valley Pipeline in Virginia and West Virginia, which has been strongly backed by Democratic Senator Joe Manchin. The group Food & Water Watch condemned this provision, saying it will irreversibly scar Biden’s legacy on the environment and clean energy. Virginia’s Democratic Senator Tim Kaine says he’ll introduce an amendment to strip the Mountain Valley Pipeline from the debt limit bill.
The debt ceiling legislation now heads today to the House Rules Committee, where two members of the House Freedom Caucus — Congressmembers Chip Roy of Texas and Ralph Norman of South Carolina — have already said they oppose the deal. Meanwhile, South Carolina Republican Senator Lindsey Graham has blasted the deal for not increasing the military budget enough.
Progressive critics of the deal include Bishop William Barber of the Poor People’s Campaign. He said, quote, “The great contradiction of this debt ceiling deal is that, while poverty is the fourth-leading cause of death, this deal will make it harder to get food stamps but easier to spend money on war.”
We’re joined now by Lindsay Owens, executive director of the Groundwork Collaborative, a progressive think tank. She’s a former policy adviser to Senator Elizabeth Warren.
Lindsay, welcome to Democracy Now! It’s great to have you with us. Can you basically summarize this deal further and talk about your concerns with it?
LINDSAY OWENS: Sure. So, the deal does two big things. First, it suspends the debt ceiling until January 2025. So, assuming Congress gets this passed before the June 5th X-date, we hopefully won’t be in position to default on our debt again until early 2025, when we’ll get to do this all over again.
The second thing that the proposal does is sets two years of budget caps. This is effectively the maximum amount of money that Congress allocates for the federal government to spend over the next two years. As you mentioned, for the first year, they set, effectively, flat funding, and for the second year, a 1% increase. But I think it’s really important to know that given the high inflation that Americans are experiencing right now, flat funding isn’t so flat. It’s actually an inflation-adjusted cut, which means that we will not be able to offer the same amount of services we did last year, after inflation takes its share — really, eats its share.
And then, in addition to the funding levels and, obviously, the suspension of the debt ceiling, you know, Congress tucked in a variety of other pretty harmful proposals, including the Mountain Valley Pipeline being greenlit, including basically bringing student loan payments back online beginning in September, which is really critically important, given that, you know, the Supreme Court is hearing — has heard this case and will be deciding soon. If the Supreme Court knocks down the Biden administration’s effort to offer broad-based student loan forgiveness, as early as September 1st, Americans will have to start paying those student loans again.
So there are a number of problematic provisions that Congress tucked into this proposal that they’ll be voting on later this week that I think really set us back in terms of the economic health of this country.
AMY GOODMAN: I want to go to New York Congressmember Alexandria Ocasio-Cortez speaking on the House floor Thursday.
REP. ALEXANDRIA OCASIO-CORTEZ: Republicans have run up a bill that they now do not want to pay. They have run up this bill with extremely excessive military spending. They have run up this bill with extraordinary tax cuts for the wealthiest people in this country. And now when it comes down to time to pay for this bill, they do not want to pay it.
And not only that, but they are accusing Democrats of saying we spend too much. For anyone that wants to entertain that thought, I ask you to think about the last time a person said — has said in this country that the government does too much for them, that their Social Security check was too high, that teachers are paid too much. When was the last time anyone has heard or seen that?
AMY GOODMAN: Progressive Caucus Chair Representative Pramila Jayapal spoke to CNN’s Jake Tapper about the new work requirements in the debt deal.
REP. PRAMILA JAYAPAL: We are one of the only countries in the world, if not the only country in the world that is an industrialized country, that puts any requirements on people who just want food. So, very bad policy, does not save money, and, by the way, does not work. We’ve seen reams of data that show that when you put these work requirements in, they’re really just administrative red tape that prevent the people who need help from getting help.
AMY GOODMAN: And speaking to Fox News Monday, the Florida Republican governor and presidential hopeful Ron DeSantis blasted the deal.
GOV. RON DESANTIS: Prior to this deal, Kayleigh, our country was careening towards bankruptcy. And after this deal, our country will still be careening towards bankruptcy. And to say you can do $4 trillion of increases in the next year and a half, I mean, that’s a massive amount of spending. I think that we’ve gotten ourselves on a trajectory here, really since March of 2020 with some of the COVID spending; it totally reset the budget, and they’re sticking with that. And I think that that’s just going to be totally inadequate to get us in a better spot.
Look, in Florida, we run big budget surpluses. We have a $1.2 trillion economy, but our debt is only $17 billion, second lowest per capita in the country. But we make tough choices, and we make sure that we look forward to the long haul. Obviously, in Washington, D.C., they do these cycles to just get them through to the next election. And that’s ultimately one of the reasons why they continue to fail.
AMY GOODMAN: Congressmember Chip Roy of Texas called the deal a “turd sandwich.” And the far-right radical Lauren Boebert of Colorado said, “Eliminating $1.8 billion for Biden’s new army of IRS agents is great until you realize that Democrats appropriated $80 billion for [the IRS].” Lindsay Owens, if you can respond to it all?
LINDSAY OWENS: Sure. I mean, it’s interesting how Congress always finds the money for military spending, always finds the money to cut taxes for the wealthiest Americans. And I think the IRS funding cuts in this bill are a great example of this.
You know, last year, when Congress passed the Inflation Reduction Act, they allocated $80 billion in new spending for the IRS. That spending is supposed to do a couple of things. First, it’s supposed to enable the IRS to go after the wealthiest tax cheats. About 70% of the tax gap — that’s the difference between the taxes owed and the taxes collected by the IRS — are actually coming from the top 1% of filers who are evading their taxes. And the IRS just hasn’t had the resources — the humans, the staff, and the financial resources — to crack down on that, to go after those tax evaders. And actually, over time, over the last 10 years, audits of the wealthiest filers have dropped precipitously. And so, when Republicans are going after this IRS funding, they’re very explicitly, effectively, greenlighting paving the way for the wealthiest Americans to continue cheating on their taxes.
The other thing that that money was slated to do is really modernize the agency, to be able to bring down wait times so that Americans who have questions about filing their taxes can get on the phone with an agent and get those questions answered. And it’s already working. Call wait times were down 85% this tax season, which is really wonderful for so many Americans, I mean, really improving that customer service.
So, you know, I think the IRS cuts are really unfortunate here. And I think they really show the hypocrisy of the Republican Party, who likes to talk a lot about deficit reduction, but actually ushered in a series of cuts that increases the deficit, because when you spend money on the IRS, you not only recoup all of that money back, you actually recoup more in those additional revenues that the agency is able to bring in by cracking down on the wealthiest tax cheats.
AMY GOODMAN: So, Lindsay Owens, what is the Groundwork Collaborative’s alternatives at this point in a number of different areas? And how does this work right now through the House, which has been called back? Now today in the House Rules Committee, will it even get out of that? And then, tomorrow, a vote expected.
LINDSAY OWENS: Yeah. You’re hearing a lot from the Biden administration officials right now as they try to sell this deal, which, obviously, you know, we don’t want to default on our debt. It would be an extraordinary catastrophe. You know, economists predict up to 7 or 8 million Americans unemployed if we did that. So, obviously, we want to avoid the worst-case scenario. But you’re hearing a lot from the administration that, you know, this deal could have been worse, and so Democrats really need to line up behind it.
And, you know, our position at the Groundwork Collaborative is that this deal could also have been better, that it’s possible to take care of the debt ceiling without kicking older Americans who need food assistance in the teeth, which is what this bill does, increasing those SNAP work requirements. You know, we have work requirements already on the books for individuals 18 to 49, and this bill extends those to folks ages 50 to 55. I mean, if you are a poor American in your early fifties not working, you face a lot of obstacles to getting back into the labor market — age discrimination; you know, your skills may have been atrophied; you’ve been out of the labor market for a while. You know, a lot of older Americans are not going to be able to clear that hurdle, and, as a result, go without food.
And so, I think, you know, there was an easier, softer way here first, I think, as many of us advocated for. You know, as soon as we realized that we wouldn’t have the House of Representatives in this next Congress right after the election in November, you know, Congress should have taken on the debt ceiling then, during the lame duck, and avoided this debacle of hostage-taking by Kevin McCarthy altogether. But also I think there are alternatives the Biden administration could pursue to negotiation even still, including invoking the 14th Amendment, which effectively says we have to pay our debts, and so we’ll do that.
So, I think, going forward, you know, we’re going to be in this position again in 2025. And it’s really our hope that as we approach that 2025 debt ceiling limit again, we explore alternatives, including, if we want to bring down the deficit, let’s do it through revenue. Let’s tax the wealthiest Americans and corporations, make sure they pay their fair share, instead of, you know, this sort of death-by-a-thousand-cuts scenario where we really just go after programs that so many Americans depend on, that, frankly, are already underfunded after decades of not really meeting the needs of Americans on a number of counts.
AMY GOODMAN: So, Lindsay Owens, does the Groundwork Collaborative recommend that the Progressive Caucus vote down this deal?
LINDSAY OWENS: Look, I think we have to clear the debt ceiling, so I would say, you know, if we’re getting to the point where McCarthy and the Republican caucus in the House is unable to supply the votes to get this over the finish line, and therefore they need the Progressive Caucus’s vote to pass this bill, then I think the short version is the progressives should get something for it. Let’s get some policies in place that work for Americans. Let’s maybe remove this harmful student loan provision, so that if the Supreme Court does strike down broad-based student loan forgiveness, Americans can get another extension while the administration works on a Plan B. So, I think if the progressives are going to have to vote for this, they should get something for their vote.
AMY GOODMAN: Lindsay Owens, I want to thank you for being with us, executive director of the Groundwork Collaborative.
Coming up, we look at a major new biography of Martin Luther King based in part on thousands of newly released FBI files on the human rights leader. We’ll speak with author Jonathan Eig and also ask him about what he revealed about how the world misunderstands what Martin Luther King thought of Malcolm X. Stay with us.
AMY GOODMAN: Harry Belafonte singing “Martin Luther King” at a concert in Germany in 1988.