Washington D.C. – Republican House Speaker Kevin McCarthy’s speech today before the New York Stock Exchange amounted to nothing more than a political stunt designed to pass the buck and distract from reality that the looming default crisis is entirely of the MAGA House majority’s making. McCarthy himself admitted it’s a manufactured crisis, echoing his prior statement that the House refuses to pass a no-harmful-cuts-attached bill lifting the debt ceiling – ignoring pleas from economists and business leaders to pass a clean bill to avoid severe economic consequences for Main Street and Wall Street alike.
The Speaker doubled down on the MAGA majority’s threats to hold the economy hostage and keep the nation from paying its bills, but couldn’t even articulate the ransom demands. McCarthy offered nothing by vague promises of a plan with unspecified spending cuts, a guarantee big corporations won’t pay a penny more in taxes, and no assurances he even has enough votes to pass it in the House. While MAGA extremists in Congress can’t seem to agree on the degree to which to punish seniors, workers, and low-income Americans with cuts to crucial safety nets – they’re in complete alignment that no billionaire or profiteering corporation should pay their fair share.”
Liz Zelnick, Director of Accountable.US’ Economic Security & Corporate Power program.
Here Are the Key Questions Speaker McCarthy Failed to Answer Today:
1) Why Do MAGA Republicans Offer Nothing But A Lose-Lose Proposition for Average Americans?
While no official proposal for avoiding default has been put forward, Republicans in Congress have floated a litany of cuts and barriers to relief they want that would harm millions of Americans. MAGA ideas include slashing Social Security and Medicare benefits; gutting student debt relief, taking away IRS resources that go after wealthy tax cheats, decimating public safety; shipping American clean energy jobs overseas; and erecting cruel and counterproductive new barriers to food assistance and Medicaid, a program that provides health services to women, children and seniors.
If their demands are not met, they threaten to default on our debt, which would have devastating consequences for the economy and financial system. Medicare payments for seniors would be missed. Seniors would not receive their Social Security. Veterans would not get their VA benefits. 6 million people would lose their jobs. $15 trillion in household wealth would be erased. Unemployment would skyrocket to 7 percent. Average workers near retirement could take a $20,000 hit to their retirement savings.
New homeowners could see their monthly mortgage payment go up more than $150,
costing an extra $54,300 over the life of their loan. The markets would plummet. All told, it would be an unmitigated disaster for Main Street and Wall Street – with a deep recession all but guaranteed.
Average American families lose either way under this House Republican brinkmanship. They aren’t offering a real choice, only political stunts and economic self-sabotage.
2) Why Do None of the Republican Debt Proposals Ask Wealthy Corporations and Billionaires to Pay Their Fair Share?
Notably, of all the House Republican default plans circulated, not one has made any mention of big corporations paying their fair share despite enjoying hundreds of billions of dollars in wasteful tax cuts that fuel the deficit. MAGA extremists keep finding new ways to punish America’s middle class, seniors and most vulnerable while never asking highly-profitable corporations and their billionaire donors to contribute a dime more.
3) Why Do House Republicans Pretend to Care About Debt Only When It’s Politically Convenient?
It is hard to take Congressional Republican ‘concerns’ over debt seriously given their long history of exacerbating it. In fact, one study found “if not for the Bush tax cuts and their extensions—as well as the Trump tax cuts—revenues would be on track to keep pace with spending indefinitely, and the debt ratio (debt as a percentage of the economy) would be declining. Instead, these tax cuts have added $10 trillion to the debt since their enactment and are responsible for 57 percent of the increase in the debt ratio since 2001, and more than 90 percent of the increase in the debt ratio […].”
Not a single Republican in Congress voted for President Biden’s Inflation Reduction Act even after the Congressional Budget Office (CBO) found it would reduce deficits by over $58 billion over a decade. Adding insult to injury, among the debt proposals House Republicans have floated in recent weeks includes gutting resources in the Inflation Reduction Act for holding wealthy tax cheats accountable. If these Republicans have their way, the nonpartisan CBO found freezing these IRS enforcement resources would add $114.4 billion to the deficit over a decade.
And many of these same Republicans voted to pay the nation’s bills “with minimal drama” while the Trump administration added $7 trillion in federal debt – debt the Biden administration inherited.