B.W. Sculos & Ashley Rogers
Rio Grande Valley United Faculty, TFA, NEA member (personal capacity)
Edinburg, TX / Philadelphia, PA
On March 8, the Senate postponed a partial government shutdown by passing another temporary funding bill continuing the 2023 budget. The threat of a government shutdown, including furloughs of many government employees and the closure of vital services, is still in the cards as the bill only funds 30% of the federal government and expires in six months. The deadline for the remainder of the appropriations is March 22—just two weeks away.
This year’s fight over the budget began in January with the debt ceiling crisis. The US debt of $33.85 trillion is largely the result of the invasions of the Middle East, like the invasions of Iraq and Afghanistan, and massive corporate bailouts during the 2008 financial crisis.
Rather than cutting the massive $1.3 trillion military budget and increasing taxes on corporations and the wealthy, the capitalist backers of the Republican and Democratic parties would rather cut social programs that help the working class. In May, President Biden reached an agreement with the Republicans that capped increases to social programs (in effect a budget cut, with inflation) and cut money allocated to the IRS to catch wealthy tax dodgers.
While the Democrats blame the Republicans entirely for the danger of a shutdown, neither party supports cutting the massive military budget to reduce spending. A key roadblock in negotiations is the Democrats’ refusal to accept a deal that doesn’t include military funding for Ukraine. In October Biden requested a $105 billion “national security package” from Congress that includes $61.4 billion in military funding for Ukraine, $14.3 billion in military funding for Israel, $7.4 billion in military funding for Taiwan, and $13.6 billion to continue Trump’s border wall.
During a government shutdown, an estimated 2.1 million federal employees will have their pay delayed until after the shutdown, while an estimated 4 million federal contractors will see no pay at all. Some essential government workers will have to continue to work without pay. Social services like SNAP and WIC that millions rely on to keep their families fed will run out.
What is the Debt Ceiling?
Also known as the debt limit, the debt ceiling is the total amount of money the US government can borrow to pay for things the government does. While conservatives regularly argue that government spending is bad for capitalism, government spending has always played an important role in the development of capitalism, and government borrowing has become increasingly important to global capitalism as more and more wealth is tied to finance. If the US government were unable to borrow money, the US economy and the global economy would stagnate. However, the benefits of debt-financed capitalism have always flowed upward to the wealthiest class. Therefore, a limit on the debt ceiling would certainly hit the capitalist class hard, but the capitalist class has always been skilled at making sure that the working class feel the pain first and the hardest.
What Was The Debt Ceiling Debate All About?
The Democratic Party and the majority of the Republican Party agreed on raising the debt ceiling, but the Republicans demanded cuts to government spending as a condition. Of course, no cuts to spending on the US military were ever considered—only social programs that benefit the poor and working class. Many Republicans don’t want to raise the debt limit at all, thinking that maintaining the current cap would force massive cuts to government spending. The Democrats simply wanted to keep business as usual, continuing a system that provides enormous benefit to the capitalist class and the wealthiest while depriving the working class of a stable living.
Biden worked out a “compromise” with former Speaker McCarthy to eliminate the debt limit until 2025. Additionally, Biden agreed to keep 2024 government spending at 2023 levels. After 2024, government spending can only increase by 1% for 2025. Heinously, but unsurprisingly, these caps do not apply to “defense” spending.
But the deal gets worse. Biden agreed to increased work requirements for older people on SNAP (food stamps). Biden also agreed to force the return of any unspent COVID funding, despite the pandemic lingering on and many states and localities struggling to recover fully.
Lastly, the Democrats agreed to cut roughly $20 billion from the IRS. These funds were going to be used to modernize the agency and hire more staff to enforce the already-too-weak tax code on the super-wealthy. It is also worth noting that this budget cut to the IRS is actually projected to increase the national debt because the IRS will be even less able to collect from corporations and the wealthy. The so-called “compromises” in the deal represent huge wins for the capitalist class that the Democrats agreed to with only token resistance.
Overall, whether the debt ceiling gets raised or not does not directly affect the working class. Whether the government spends what it brings in or spends more through borrowing is not as relevant to the working class as how the money is spent. Looking at the specifics of the deal the two capitalist parties agreed to, the working class will be worse off. Additional work requirements to access basic necessities like food further burden the people in our society who are already the worst off. Capping non-military government spending also undermines any potential effort to expand vital social services in the coming years. Cuts to the IRS mean that while the working class largely pays what they’re legally required to pay in terms of taxes, the rich will continue to find ways to not pay what little they owe.
Instead of the debt ceiling deal, many legal experts suggested that President Biden could have unilaterally raised the debt ceiling himself (or ignored it) as the 14th amendment ensures the validity of all debt owed by the US government. Alternatively, the Biden administration could have insisted on cuts to the military instead of capping the budget and slashing social spending. Finally, and more simply, the Democrats could have refused to entertain any cuts as part of the debt ceiling bill.
What Does The Debt Ceiling Deal Have To Do With The Fight Over The Budget?
Part of the Democrats’ justification for the debt ceiling deal was the expectation that the funding limits set in the bill would be accepted as the budget for 2024. While Republicans in the House were initially demanding a further $119 billion in cuts, McCarthy’s replacement as Speaker of the House, Republican Mike Johnson, stuck to the deal, and in January “made another agreement with [Senate Majority Leader] Democrat Charles E. Schumer on a top-line discretionary spending amount for the year: $1.7 trillion.” The Biden-McCarthy deal was codified into law in the Fiscal Responsibility Act (FRA) in June, but several “side deals” were made to reallocate an additional $54 billion to cover the gaps in spending from the FRA’s cuts. These “side deals” aren’t in the law and have only been made public through leaks to the media. It’s doubtful these side deals will make it into the final budget which means in effect that non-defense spending will be cut by an estimated 7-10% when the new budget is enacted.
Democrats will paint this as a casualty of Republicans’ refusal to hold to the deal. But it’s clear what the Democrats value most: they eagerly agreed to the FRA’s cuts without once raising the possibility of cuts to defense spending. While vital government programs might be short over $50 billion in next year’s budget, Democrats are still pushing for Biden’s $105 billion defense package.
The Democrats market themselves as the “party of the people” yet only limit themselves to tinkering around the edges of capitalism, never proposing anything that would threaten the power of capitalists. Meanwhile, they work hand-in-hand with Republicans to crush the working class.
We need a workers’ party independent of the two corporate parties that can actually represent workers’ interests. Such a party would give working people a tool to fight for a workers’ budget that includes universal health care, a massive expansion of public education and public transportation, guaranteed housing, a socialist Green New Deal, higher wages for all government employees at the federal, state, and local level, and more.
Image: Rep. Steve Scalise, R-La., Rep. Mike Johnson, R-La., and Republican Leader Kevin McCarthy, R-Calif., are seen on the floor during Speaker of House votes on Friday, January 6, 2023. (Tom Williams/CQ Roll Call)
Independent Socialist Group 
