Skip to content
Search

Latest Stories

Top Stories

How the U.S. got two financial crises for the price of one

President Biden speaking to reporters

President Biden spoke to reporters Monday about the need to raise the debt ceiling.

Chip Somodevilla/Getty Images
Wilson is an associate professor of political science at the University of Indianapolis and a public voices fellow at The OpEd Project.

A major crisis may have been averted, but the short-term gain will lead to a much greater long-term cost.

Congress recently narrowly avoided another government shutdown after contentious back-and-forth between Democrats and Republicans and first failing to pass a federal funding bill. The potential shutdown would have affected key government services such as the certain health care programs, food stamps and national parks.

Preventing the shutdown with mere hours to go may seem like a political victory but, to be sure, no one is winning.

Yes, vital services have been given the lifeline to continue but at a high cost. The measures assure they will have enough funding to sustain through Dec. 3rd, at which point another spending measure must be secured or a government shutdown will occur.

The major issues and conflicts that led to the partisan divide in the first place are far from resolved. Instead of meeting the deadline with resolution and newly recommitted compromise, policymakers hastily made short-term deals. They valued speed over quality and disregarded compromise.

No one needs to be reminded that our nation is facing one of the worst public health crises of our time with Covid-19 reaching the recent milestone of 700,000 deaths. Nor has anyone likely forgotten the need for vital government services, many of which would have been impacted by a shutdown. While addressing these issues fiscally may have been avoided for now, the longer impact still remains, both in terms of the financial and political repercussions.

Sign up for The Fulcrum newsletter

Treasury Secretary Janet Yellen recently warned of the implications that failing to increase the debt ceiling could have, citing the potential for "widespread economic catastrophe." Even by narrowly avoiding the government shutdown, the country is faced with potentially defaulting on its debt as it approaches the national debt limit.

The United States usually spends more than it takes in and that tradition requires outside loans to make up the difference. Defaulting would waver the confidence of creditors and could usher in a series of steep political consequences, from future financial security to diplomacy with current and former allies.

The quick fix to avoid shutting down the government is not likely to impress U.S. creditors or offer much promise in addressing the arguably greater financial crisis in the debt ceiling limitations.

Understanding how it got to this point is easy. Debt accrues when debits outweigh credits. Necessarily expanding the role of government, especially in the last 19 months of Covid has only added to the costs, estimated by the Congressional Budget Office to be more than $2.4 trillion.

Yet identifying who is responsible becomes a far greater challenge. Some Democrats argue that both parties proposed policies that have led to this point while many Republicans have repeatedly said they will not pass a measure that will support policies they don't back. These include some items in the more liberal social agenda negotiated within the Democratic Party.

Recent polling indicates Americans generally agree with Republicans and subscribe blame to Democrats — as the party has enjoyed unified power in both houses of Congress and the White House since the last election.

With the congressional midterm elections looming next year, it is a political hot potato that no single party or politician wants to hold. And after seeing how leaders struggled to address government shutdown, the debt ceiling proves to be a far greater political challenge.

To be sure, the government has shut down 10 times in the last four decades but the circumstances have never been more dire and simultaneously avoidable.

Covid cases and deaths are slowly starting to drop nationally but the pandemic and its ravaging effects are far from over. Though government at all levels has been involved in economic recovery and public health measures, the federal government has borne the bulk of that responsibility, primarily under the American Rescue Plan. That plan allocated $1 trillion in tax credits and programs, $350 billion to emergency management funding, and $10 billion in relief for homeowners.

The price tag is hefty; the loss of lives is far greater.

Without congressional compromise to fund government agencies and avoid defaulting on credits by extending the national debt ceiling, the nation will face a substantial financial catastrophe. This would be the greatest challenge to the administration since President Biden took office in January.

Biden has been relatively quiet on this issue, seemingly leaving it up to Congress to work out the fight while he still reels from the debacle in Afghanistan and continues to focus on vaccination efforts as a reductive approach to Covid.

One of the challenges for Democrats is assuaging more liberal interests with more moderate pursuits and appeasing everyone in the party through the process. Biden initially ran against dozens of potential presidential candidates within his party, won his primary and ultimately the general election — all with the promise of compromise, moderate policies and strong leadership.

As the nation approaches the threat of the debt ceiling at the end of the month, Americans need compromise and strong leadership more than ever before.

This is the urgent season of change every American needs to witness.

Read More

US Capitol

Each branch of government needs to get serious about restoring the public's trust.

Andrey Denisyuk/Getty Images

We need a government that works

Frazier is an assistant professor at the Crump College of Law at St. Thomas University and a Tarbell fellow.

The first — and really only — order of business for the government is to solve problems beyond the grasp of a single person or a small community. In exchange for that service, we the people surrender some of our income and liberty. This grand bargain breaks down when the government decides it’s got other things to do besides take care of everything from our sewage to our space debris.

The longer the government falls short of our expectations, the more likely the people will be to opt out of their own obligations, such as voting. This dangerous tit-for-tat is hard to reverse. A less effective government sparks a less dutiful public, which makes it harder for the government to perform, and so on.

Keep ReadingShow less
People wading in a river, in front of a destroyed house

Workers walk through the Rocky Broad River in Chimney Rock, N.C., near a home destoryed by Hurricane Helene.

Matt McClain/The Washington Post via Getty Images

Project 2025 would have 'catastrophic' impact on hurricane warnings

Raj Ghanekar is a student at Northwestern University and a reporter for the school’s Medill News Service.

Residents in the southeastern United States are still recovering from devastating damage brought on by back-to-back hurricanes. As federal, state and local officials continue working to deliver aid, experts say the country would be less prepared for future hurricanes if proposals included the conservative plan known as Project 2025 were to be put in place.

The National Oceanic and Atmospheric Administration houses the National Weather Service and National Hurricane Center, which are vital to predicting these cyclones. But the 920-page proposal published by the Heritage Foundation, a conservative think tank, argues NOAA “should be dismantled” and includes steps to undermine its authority and position leading the country’s planning for severe weather events, such as providing official emergency warnings.

Keep ReadingShow less
People walking alongside a river

Migrants from Guatemala prepare to cross the Rio Grande, to enter the United States in February. The best way to address immigration is fix problems caused by past interventions in foreign countries.

Andrew Lichtenstein/Corbis via Getty Images

Immigration isn't a border issue – it's caused by U.S. interventions

Yates-Doerr is an associate professor anthropology at Oregon State University and the author of “Mal-Nutrition: Maternal Health Science and the Reproduction of Harm.” She is also a fellow with The OpEd Project.

Immigration is a hot-button topic in the presidential election, with Vice President Kamala Harris and former President Donald Trump both promising to crack down hard at the border. But neither candidate is talking about a root cause of immigration: the long history of U.S. meddling, which has directly resulted in displacement. If our politicians really wanted to address immigration, they would look not at the border but at past actions of the U.S. government, which have directly produced so much of the immigration we see today.

Keep ReadingShow less