Donald Trump is several weeks away from being inaugurated US president for a second term, but he has already demonstrated that, for all his popular adulation, he may not be able to control his own party in Congress.
Legislators, particularly in the House of Representatives, were faced with another of their brinkmanship-flaunting crises over extending the debt ceiling – the amount that the country is allowed, by law, to owe creditors. But cooler heads arrived at a reasonable compromise to avoid a potentially disastrous Christmas shutdown that could have led to more than 800,000 public employees losing their pay cheques and numerous public services and amenities being made unavailable.
Congress’s spending package extended the suspension of the debt ceiling. A series of profoundly misguided laws, beginning in 1917, has ensured that Congress must routinely suspend the “debt ceiling” to keep the government functioning and prevent the country from defaulting on its extensive debts.
If the US ever did default, it would probably send not just the US economy but also the global economy into a tailspin, with dangerous-to-downright-cataclysmic consequences.
Senators, who serve six-year terms and represent entire states, are generally much more prudent, but increasingly Republicans, and occasionally Democrats, in the House are insisting on playing political and fiscal Russian roulette with fundamental national and global economic stability at stake. They typically grandstand about cutting spending, usually without any concrete or practicable proposals, or bring up some demagogic issue identified to secure interviews with the cable-television “news” stations and, increasingly, podcasts that drive US public opinion, such as it is.
Congress was therefore set to pass a fairly mundane compromise bill, when two potent outside forces suddenly intervened to scupper it.
Mr Trump roared his disapproval, demanding that House Republicans abolish the debt ceiling altogether. And his current right-hand man, Elon Musk, arguably the world’s wealthiest individual, took to his favourite trophy possession, X (formerly known as Twitter), to threaten all Republican legislators who did not insist on much greater cuts to public spending.
Their motivations are obvious. Mr Trump, who never ceased to complain about Democratic spending and who ironically ran on a platform of major cuts to national expenditures, would love to get rid of the debt ceiling because, despite his rhetoric, he seemingly intends to increase the national debt enormously.
That’s what he did during his first term, when the self-described “king of debt” ballooned the national debt by the third-highest amount in history, including during both world wars and the Civil War. Fuelled in particular by a huge 2017 tax cut aimed mainly at the wealthiest Americans and corporations, under Mr Trump the debt-to-GDP ratio equalled that reached at the end of the Second World War.
The incumbent President Joe Biden certainly increased the debt as well, but only by about half as much during his four years in office as Mr Trump did in his first term. And this is despite Mr Biden’s significant increases to public investments, pandemic expenditures, and a national economic policy aimed at boosting domestic manufacturing, including of strategic goods such as computer chips.
Mr Trump has never seemed bothered by glaring contradictions in his public platforms. This year he ran on lowering inflation while promising large new tariffs on imported goods and the mass deportation of millions of asylum-seekers and other migrants. One could hardly identify two policies more precisely suited to increase inflation swiftly and considerably. But his voters either don’t appear to have put two and two together, or if they do, just don’t care.
So while he ran on reducing spending and the national debt, which he has vowed he could eliminate in eight years, in fact he is preparing two core agenda items that can only significantly increase them: another huge tax cut and the aforementioned mass deportations. The tax cuts can only slash government income, especially since there is no apparent or proposed alternative source. And Mr Trump’s deportation of many millions of migrants, as he promises, has never been budgeted but, if actually carried out, will inevitably cost countless billions.
Mr Musk, who, as I pointed out many weeks ago in these pages, is attempting to politically weaponise his fabulous wealth, has been put in joint charge of a new government “department” of efficiency. It’s not a department. In fact, it’s yet another familiar blue-ribbon commission into government waste. There have been quite a few of these in the past, to little effect. But he appears to have embraced the task sufficiently to put out more than 150 X posts threatening that Congress members who voted for the original compromise should be thrown out of office in two years, when House members stand for re-election.
Many House members blamed Speaker Mike Johnson for delaying the budget vote sufficiently to give Mr Trump and Mr Musk time to create a most unwelcome Christmas crisis. Ultimately, Mr Johnson, with Mr Trump’s grudging support, was able to secure a budget measure that will last until March 14, when the whole wretched soap opera will be re-enacted yet again. But he had to rely on the support of the Democrats, who no doubt reasonably feared that Mr Biden would be blamed, and become the Ebenezer Scrooge of this Washington Christmas pantomime, and therefore all voted for the resolution.
Mr Musk got some of the cuts he wanted, such as to funding for childhood cancer research, but Mr Trump didn’t get his debt ceiling abolition. More ominously for him, 39 House Republicans – the party only has a four or five-vote majority – defied him on the bill, insisting that the cuts didn’t go far enough.
This group, or at least many of them – more than enough to create endless headaches for him – may be on a collision course with Mr Trump over government spending and, especially, the debt ceiling. Mr Trump only wants the debt ceiling gone because he seemingly intends to increase the debt. That may not sit well with elements in his party that took him seriously and literally when he insisted that he was running on shrinking public spending and national debt.
Mr Trump has already demonstrated a troubling inability to control Republican House members and a reliance on Democratic support that will probably vanish next year. Constructive legislation should always be supported. But Democrats have no interest in saving Mr Trump and other Republicans from their own radicalism and incoherence.
