“A crisis averted,” President Biden declared after signing the agreement to raise the debt ceiling into law. Imposed by Congress during the First World War, and adjusted in 1939, the debt ceiling sets a limit to how much debt the U.S. government can incur to pay its financial obligations. Throughout the years, the debt ceiling has been used as political leverage by opposing parties.
With negotiations continuing to almost the very last minute, Biden and House Speaker Kevin McCarthy averted a crisis where the government defaults on its debt. This set the stage for whatever deal to be made to be deemed a victory because at least the country avoided default. But no victory comes without a cost, and in America it’s often the poor that pay the highest tab.
The ultimate version of the bill brings a formal end to the student loan pandemic pause with repayments set to begin at the end of August — benefitting the online bank SoFi, which was suing the U.S. government over the pause — and increases work requirements for food and cash assistance programs.
The Mountain Valley Pipeline, West Virginia Senator Joe Manchin’s pet project, was thrown into the package, allowing for a 300-plus-mile pipeline transporting methane gas to move forward. Activists have sought to block its construction, insisting the project will disrupt habitats in waterways and natural habitats. The bill also makes it easier for energy companies to secure permits for infrastructure. While this could speed up renewable projects, it’s also going to benefit the fossil fuel industry. This is just a few months after the United Nations said that the world needs to rapidly cut emissions in order to secure a livable future.
However Democrats try to spin this, the deal is bad for people who aren’t wealthy. It’s reminiscent of the 2011 debt ceiling negotiation, when President Barack Obama went head to head with then-House Speaker John Boehner as the Tea Party was making its mark in the Republican Party. In a 2011 write-up of the deal’s winners and losers, the Washington Post wrote, “The tea party — inside and outside Congress — will almost certainly be emboldened by the result of this fight.” Similar to today, programs benefiting the poor were served up as concessions to Republicans. And as in 2023, students were also thrown under the bus in a major way. The bill ended loan repayment incentives and federal student loan subsidies for graduate students. It was the tail end of the Great Recession, after millions lost their home and out of work after the government bailed out Wall Street, so these cuts were especially painful.
This was also a period where people around the world were revolting against the austerity measures being imposed upon them. People were toppling authoritarian leaders in Egypt and Tunisia, gathering in strikes and assemblies in Greece and Spain, and joining Occupy encampments across the U.S. It was during this time of extreme economic oppression that people were brave enough to struggle for a new way of organizing society, where a small elite didn’t hold so much power over the masses. I can’t help but look around and think how badly we needed something like that now, despite the fact that we could face a similar repressive fate.
In my view, the moment the government ended pandemic-era unemployment benefits and other direct payment assistance, we should have had protests and a general strike demanding they make it permanent through a universal basic income. People in this country are drowning with no lifeboat in sight. And while it’s great that some progressives voted against the debt ceiling bill, they continue to prop up the false idea that the Democrats will ever be a party for the poor. Because clearly you can not claim to represent the interest of the most vulnerable when you are constantly willing to offer them up as collateral.
While elites protecting their own and rampant corporate greed aren’t new phenomena, it feels like part of what we’re witnessing is a reaction to the 2020 uprisings and pandemic economic aid. People got a glimpse that another world was possible and that terrified the rich, and they have been punishing us ever since. Corporations have used the excuse of inflation as a way to engage in price gouging and set record profits for themselves while working class people struggle to keep up. A recent New York Times piece looked at how companies continued to raise prices even as initial factors which contributed to inflation had subsided. “Inflation is going to stay much higher than it needs to be, because companies are being greedy,” Albert Edwards, a global financial strategist, told the Times.
Any hope that wealth could be recuperated through taxes has become threatened as one of the debt ceiling agreements included $21.4 billion in cuts to the Internal Revenue Services. The Congressional of Budget Offices (CBO) estimated that this cut will result in $40.4 billion in lost revenue. This blatant act of hypocrisy to protect the wealthy just shows how our representatives are either too weak to fight against the interest of billionaires or enablers of their tyranny.
The only thing that can end our current system of oligarchy is a mass movement that can act outside the constraints of the two party system, which is enthralled to the interests of capital. This movement should demand a broad transfer of wealth from the very rich to the rest of us. It should take lessons from the social movements of 2011 and build on them, so that it avoids making the same mistakes. There are too many to dive into here, but a feature that must be corrected was how the past wave of mass economic populism sidelined issues of race and gender violence. There’s this misconception by many leftists that movements centered on class must abandon discussion around anti-Blackness and white supremacy in an effort to build a larger movement with the white working class. Doing so fails to truly understand how systems of racial hierarchies still impact others more. Black and Latinx communities have been harder hit by inflation, and Black student loan borrowers will be more impacted by the August repayment requirement. And this latest recession has disproportionately impacted women. Discussing these realities is important to understanding that while we may be all fighters in the class war, for some of us there are more battles to be won.
Biden celebrated a “crisis averted” by reaching the debt ceiling deal. How dysfunctional is this country and its system of governance that it routinely allows its future stability to be gambled with? We are in very serious times, and this country is being run by unserious people. The rich have gotten too comfortable and our politicians are too complacent. It’s time to fight back.
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