The New Debt Deal: A Betrayal of Conservative Principles

The new debt deal that President Biden and Speaker McCarthy reached last week is a betrayal of conservative principles. It gives the Democrats everything they want and gives the Republicans nothing they need. It suspends the debt limit for two years, allowing the government to spend more without any limit or oversight. It does not touch the major drivers of future deficits, such as Social Security, Medicare and Medicaid. It does not prevent Biden from pursuing more tax hikes in the future, such as his proposed corporate tax increase and capital gains tax increase. It also leaves intact many of Biden’s signature policies, such as student loan forgiveness and parts of the Inflation Reduction Act, that add to the long-term debt burden.

The Cons

The deal includes many provisions that conservatives should oppose, such as:

Debt limit suspension 

The deal suspends the debt limit until January 1, 2025, effectively giving the government a blank check to borrow more money without any limit or oversight. This will worsen the nation’s debt problem and undermine fiscal responsibility. It also sets a bad precedent for future negotiations, as Democrats will demand a clean debt limit increase every time.

No entitlement reform

The deal does not touch the major drivers of future deficits, such as Social Security, Medicare and Medicaid. These programs are projected to run out of money in the next decade or two, but the deal does nothing to address their solvency or sustainability. It also leaves intact many of Biden’s signature policies, such as student loan forgiveness and parts of the Inflation Reduction Act, that add to the long-term debt burden.

No tax relief

The deal does not include any tax relief for individuals or businesses, despite the high tax burden imposed by Biden’s agenda. It also does not prevent Biden from pursuing more tax hikes in the future, such as his proposed corporate tax increase and capital gains tax increase. These tax increases will hurt economic growth and job creation.

The Fake Pros

The deal includes some provisions that conservatives are supposed to applaud, but they are either insignificant or harmful, such as:

Work requirements

The deal tightens restrictions for the SNAP food assistance program and the TANF cash aid program, requiring able-bodied adults without children to work or participate in job training to receive benefits. These work requirements are weak and full of loopholes, such as exemptions for homeless people and veterans. They will do little to reduce dependency and encourage self-reliance among low-income Americans. They will also expire in 2030, making them a temporary band-aid rather than a permanent solution.

Energy permitting

The deal streamlines the process for approving energy projects on federal lands, reducing red tape and environmental hurdles. This will boost domestic energy production and create jobs in the energy sector. However, this provision is overshadowed by Biden’s radical climate agenda, which seeks to eliminate fossil fuels and impose costly regulations on the energy industry. It is also likely to face legal challenges from environmental groups and activist judges who will try to block any energy development on federal lands.

Spending cuts and caps

The deal cuts and caps some non-defense discretionary spending over the next two years, saving about $300 billion over 10 years. It also revives the threat of sequestration, or across-the-board cuts, if Congress fails to abide by the spending caps. These measures are too little too late to rein in wasteful spending and curb the growth of government. They also disproportionately target defense spending, which is vital for national security and global leadership.

IRS Funding Cuts

McCarthy’s one deal breaker should have been his promise to defund President Biden’s massive $80 billion to turbocharge an already weaponized IRS. This was the totemic centerpiece of his pitch to become speaker. It was the most memorable promise of the Republicans’ midterm campaign to win back the House. It struck a chord with voters, wary of funding a new “army” of armed IRS agents to harass middle-class families and small business owners and abuse their powers to target political dissidents.

“Our very first bill will repeal the funding for 87,000 new IRS agents,” McCarthy vowed. 

“You see, we believe government should be to help you, not go after you.”

In the debt-ceiling deal McCarthy has allowed the lion’s share of that extra IRS funding to remain: preserving $78.1 billion of the $80 billion. As rebel GOP Rep Dan Bishop put it: “So there will be 85,260 more IRS agents rather than 87,000 to eat you alive. Big win.”

The Verdict

The new debt deal is a betrayal of conservative principles. It has no real pros and many cons. It gives the Democrats everything they want and gives the Republicans nothing they need. Conservatives should have rejected this deal and demand more fiscal accountability and responsibility from their leaders.