One of the most important events in terms of both government and politics to happen recently was the House Republican passage of increasing the debt ceiling, but only doing so with a very large $4.1 trillion cut in spending. 

This was important because when they passed it, even though it was only by one vote, it created a fact. Had they lost that vote — had it been one vote down instead of one vote up —  then everybody in the news media would have said, well, the House Republicans don’t have any role here. They can’t get their act together, etc. 

Now, the only people in Washington who have actually done something on the debt ceiling, are  the House Republicans. They’ve passed a bill which would raise the debt ceiling until next year. But in doing it, they’ve insisted on very significant conservative reforms and legislation. And they’ve insisted on cutting $4.1 trillion out of the spending pattern for the next decade. That was an enormous achievement, the biggest cut ever passed on a debt ceiling bill. 

It’s interesting to watch, because now, the Democrats have two problems. The first is that well, Democratic Majority Leader in the Senate, Chuck Schumer, said the bill was dead on arrival. The fact is, Schumer probably can’t get anything out of the Senate, because the Senate Republicans are not going to vote for an unreformed debt ceiling. 

And Schumer is committed to standing with President Biden and not fixing the debt ceiling with spending cuts. So the result is going to be that the only game in town is going to be the House Republican debt ceiling bill which speaker McCarthy did an amazing job, inch by inch piecing together exactly what has to be done, including two significant changes the night before the vote, to make sure that the last votes were there. 

You know, when you only have a four or five vote margin, you really have to work hard to try to get everybody on board. The fact is, Speaker Boehner couldn’t do it, Speaker Ryan couldn’t do it. And it’s a significant achievement by Speaker McCarthy to have gotten this done. 

Now, the question is what does President Biden do? Their first reaction was to say we’re not going to negotiate. Well, they have a problem. Among the American people, according to Scott Rasmussen, only 24%, — one out of every four — want to have a debt ceiling increase, with no changes. About 46% of American people are willing to have a debt ceiling increase if there are cuts in spending. But an additional 16% don’t want a debt ceiling increase at all, period, under any circumstance. 

So in fact, while almost three to one, the American people are opposed to President Biden’s position — that the only thing he’ll do is sign a debt ceiling that has no changes. It’s going to sink in over the next 30 to 60 days. it’ll get to be a crisis. The business community will go nuts, the news media will go crazy. President Biden will use really harsh, really strong language. But in the end, the objective fact that was created is that Speaker McCarthy and the House Republicans have the only game in town. 

The only currently legislated alternative to the U.S. government defaulting on its debt is, in fact,  the McCarthy bill. And I think that’s going to be the beginning of the negotiation, not the Biden position. So what you’re watching is history in the making. It could be the first real turnaround step towards getting back to the balanced budget and back to a system where we limit inflation, we limit taxes, we limit deficits and have a much healthier economy. But this was a very big week.