Politicians continued to negotiate the debt ceiling on Wednesday and Thursday but still have not reached a consensus. CNN This Morning anchors and correspondents believed the discussion surrounding the debt ceiling was unnecessary and destabilized the world economy and called Republicans’ efforts to curb America’s spending an “irrational fight.”
“Why shoot ourselves in the foot and lose something that is so critical?” anchor Poppy Harlow asked CNN’s chief business correspondent Christine Romans.
“I mean, from the outside looking in, if you're talking about a spending philosophical fight among parties over the debt ceiling. I mean, the rest of the world thinks we're absolutely utterly insane,” Romans responded. “[A]nd it's an irrational fight to have. I mean, America's borrowing power is her superpower.”
According to a CNN poll, the American people disagree with Roman’s assumption (much to her admitted surprise) that unlimited debt merits such praise. 60 percent of Americans only support raising the debt ceiling if there are spending cuts, 24 percent want the government to raise the debt ceiling no matter what, and 15 percent would allow a deficit before raising the debt ceiling.
Romans continued to argue in favor of runaway spending by suggesting Congress’s power of the purse wasn’t restricted by the laws of economics:
The United States can borrow however much money it wants and to pay for whatever it wants, whatever Congress decides, and that is a sign of strength, because there are investors around the world who will park their money into the safest place to do business, and that is the United States.
Roman’s assertion that the United States can borrow unlimited money and set its own rates neglects the repercussions such unchecked spending could cause. The increasing interest rates alone should evoke hesitation. The debt ceiling acts as a cautionary guardrail that even President Biden, spearheading the Democratic stance on the issue, discourages abolishing completely.
Romans also criticized the 15 percent of Americans who did not want to raise the debt ceiling and said, “I was really surprised that 15 percent of people said don't raise the debt ceiling, allow a default. Those are the ultimate, I guess, contrarians of the world who – uh, who want to see the U.S. economy go up in smoke.”
On Thursday, Romans continued her rant on debt talks and derided Republican behavior:
Look, there's a big discussion right now if this political brinkmanship, this political intransigence we're seeing is a feature, not a bug. And if it's a feature, not a bug, and we're talking about now ten years of this kind of behavior, I think that there are real questions whether the United States can keep its AAA credit rating even if they figure this out, because this is a serious problem here.”
Roman’s college Lauren Fox also blamed Republicans for the possibility of a default. Fox suggested Republicans had injected a timing problem into the negotiations. “That is because over and over again, Republican leaders have insisted they are going to give their members 72 hours, that’s three days, to read whatever bill and deal they come up with,” she stated.
While time was indeed running short, 72 hours to read a bill was a House of Representatives rule, not the “political brinkmanship” or “political intransigence” that Romans suggested.
Any deal will require bipartisan understanding of a proposal and significant cooperation from both sides of the aisle. Thankfully Congress does not dismiss unchecked and ever expanding debt as quickly as Romans. It’d be interesting to know if Roman’s thinks of her credit card debt the same way she thinks of the United States debt.
CNN’s anti Republican coverage of the debt ceiling was made possible because of a sponsorship from E-Trade. Their contact information is linked.
The Transcript is below, click "expand" to read.
CNN This Morning
05/24/2023
6:45 AM ETPOPPY HARLOW: Your piece on this yesterday was so excellent—
CHRISTINE ROMANS: Thank you. Thank you.
HARLOW: -- in boiling down, why shoot ourselves in the foot and lose something that is so critical?
ROMANS: I mean, from the outside looking in, if you're talking about a spending philosophical fight among parties over the debt ceiling, I mean, the rest of the world thinks we're absolutely, utterly insane. It's - and it's an irrational fight to have. I mean, America's borrowing power is her superpower. The rest of the world would kill to be able to have the position we are in.
The United States can borrow however much money it wants and to pay for whatever it wants, whatever Congress decides, and that is a sign of strength, because there are investors around the world who will park their money into the safest place to do business, and that is the United States.
Treasuries are the backbone of the global financial system. They make the dollar the world's reserve currency. Everybody around the world does business in dollars, because the U.S. is in this very prime spot as the lender to the - to - to the -- or the borrower to the rest of the world. You know, it is a really interesting position we're in.
And this is tainting that. Every time we get up to the line, this is the third time now, it tarnishes that just a little bit. We are going to have a mountain of obligation that we'll have to sell Treasuries for in the months ahead. What if borrowers - what if - what if people balk? What if they don't want to buy our Treasuries?
HARLOW: Right.
ROMANS: Or they demand higher interest rates. That could happen. They demand higher interest rates, that means our debt is even more expensive and it's even more expensive to borrow money and that actually hurts us.
HARLOW: Yes.
ROMANS: So, the thing that we're fighting about is actually making us weaker, not stronger. It's making us weaker.
KAITLAN COLLINS: Well, and it's not for new spending, it's spending that the U.S. has already incurred.
ROMANS: Yes.
COLLINS: The -- what we're hearing, though, from some Republicans, is they're saying, is June 1 actually the day? And Yellen has been very careful in her language to say, early June, possibly as soon as June 1. She's doubled down on that many times. Tripled down even. What's up with the - the - a central argument that maybe she's - maybe it's not actually June 1?
ROMANS: It's such an unhelpful distraction. She runs the cash books. She sees what's coming in and going out. We have a huge amount of obligations and there are so many variables. She has been very clear, as early as June 1.
…
8:10 AM ET
ROMANS: Yeah, and this actually was surprising to me.
First of all, I was really surprised that 15 percent of people said don't raise the debt ceiling, allow a default. Those are the ultimate, I guess, contrarians of the world who – want to see the U.S. economy go in smoke, but 60 percent said only raise the debt ceiling if there are spending cuts. I think that shows that the public is aware that debt and deficits, long term, are a concern for the United States of America.
But I would make this point that I’ve been making for some time. The debt ceiling is not an instrument of fiscal discipline. The budgeting process and the ballot box, quite frankly, are where those decisions are made. This is the least efficient way to address debt and deficits is by not raising the debt ceiling or tying spending cuts to the debt ceiling. You know, the big drivers of the nation's debt are not even what they are talking about. Social Security, Medicare, net interest on the debt, and tax receipts that are too low. So, they’re not talking about the real things that will fix the debt and deficit problem.
…
CNN This Morning
05/25/2023
6:12 AM ETLAUREN FOX: Meanwhile, they are still trying to find a way forward on the huge question of how much money the government should be spending over the next several years. The reality is even if they can clinch a deal in the next 72 hours, which could happen, there is a possibility that that is not enough time to get you to the June 1 deadline.
That is because over and over again, Republican leaders have insisted they are going to give their members 72 hours, that’s three days, to read whatever bill and deal they come up with. Then you have to move this through the U.S. Senate as well. That is going to be a heavy lift. We should also note that there are some Democrats who are getting very nervous about the direction of these discussions.
…
7:05 AM ET
CHRISTINE ROMANS: Look, there's a big discussion right now if this political brinkmanship, this political intransigence we're seeing is a feature, not a bug. And if it's a feature, not a bug, and we're talking about now ten years of this kind of behavior, I think that there are real questions whether the United States can keep its AAA credit rating even if they figure this out, because this is a serious problem here.
If we keep revisiting this, it makes the U.S. less reliable, it hurts our prestige, and that eventually can translate into the creditworthiness of the debt that we are issuing. So, that is a big discussion here.
The second discussion that's happening, frankly, is what happens exactly a week from today. That's Janet Yellen's earliest, earliest date. At that point, she said yesterday to the CNBC CEO Council, there's not enough money to pay all the obligations. I think you assume they pay the interest on our debt, and they pay any principal payments to investors, but that means Social Security checks will likely not be cut. That means, you know, government contractors could not see payments.
We don't know exactly what that'll look like. The Treasury Department hasn't said how they'll pick and choose which bills to pay. But right now, we are sitting in front of only bad choices. That's what we're looking at right now, only a bunch of really bad choices here, unless by some miracle they were to raise this debt ceiling and continue talking. You know, if they could, if they could make some sort of agreement to continue talking on their philosophical spending differences, but raise the debt ceiling, that would be the perfect outcome, and that would need to happen in the next couple of days.
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