Biden Hailed Debt Deal as a Win for the US. But Who Actually Won?

President Joe Biden on Saturday signed a debt ceiling deal into law that averts a catastrophic default by the United States through January 1, 2025, hailing it as a “big win” for the country. Critics say the agreement protects wealthy corporations and tax dodgers while imposing new cuts on key social programs and expanding work requirements for some recipients of food stamps. The legislation has also been called a “dirty deal” by climate activists because it rolls back environmental regulations and fast-tracks the approval of the Mountain Valley Pipeline through West Virginia and Virginia, a pet project of powerful Democratic West Virginia Senator Joe Manchin. “The working class of this country was deeply harmed by this bill,” says investigative journalist David Sirota of The Lever. He also faults Democratic leaders for not raising the debt ceiling after the midterm elections, when the party still had control of Congress. “What you see is a picture of a party that wanted this outcome,” says Sirota.

Transcript

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman.

President Joe Biden has signed a debt ceiling deal into law that averts a historic default by the United States. In his first address from the Oval Office, Biden said passing this budget agreement was critical.

PRESIDENT JOE BIDEN: The only way American democracy can function is through compromise and consensus, and that’s what I worked to do as your president — you know, to forge a bipartisan agreement where it’s possible and where it’s needed.

AMY GOODMAN: Progressives who opposed the bipartisan deal cited new cuts it imposes on key social programs and expanded work requirements for some recipients of food stamps. The legislation was called a “dirty deal” by climate activists, because it rolls back the National Environmental Policy Act and fast-tracks the approval and construction of the fracked gas Mountain Valley Pipeline through West Virginia and Virginia, a pet project of the powerful conservative Democratic West Virginia Senator Joe Manchin.

Meanwhile, critics say lobbyists prevented the debt bill from including tax reforms and repealing high-income tax cuts. Independent Senator Bernie Sanders, who voted “no,” spoke Saturday at a “Rally to Raise the Wage” in Charleston, South Carolina.

SEN. BERNIE SANDERS: In this moment in American history, we have a choice: Either we abdicate our responsibilities to our kids and future generations, and we allow a handful of billionaires to consolidate their wealth and their power, or we stand up and fight back.

AMY GOODMAN: For more, we’re joined in Denver, Colorado, by David Sirota, award-winning investigative journalist, founder of the news website The Lever, where his latest piece is headlined “This Is What Biden Says Is A ‘Big Win.’” Sirota is also editor-at-large for Jacobin.

Welcome back to Democracy Now!, David. OK, can you just lay out who you think gained and lost in this historic debt signing deal, historic because it would have been the first time, if it hadn’t been signed, that the country defaulted?

DAVID SIROTA: Well, certainly, the fossil fuel industry is a big winner here, as you alluded to with the Mountain Valley Pipeline, expediting that controversial pipeline, which many say will be a climate bomb at a time of a climate emergency. So, the fossil fuel industry, a huge winner here.

Defense contractors, military contractors, also big winners in this deal, in which it approved the Pentagon budget going up to another record level.

Private student lenders, who have wanted the end of the private — the student lending moratorium, they are big winners here. They have been lobbying for that. One major private student lender, its stock began rising as soon as this deal was being finalized.

And then, of course, the very rich. Again, as you alluded to, there were no measures in this debt bill to repeal the high-income tax cuts that are responsible, primarily responsible, for the increase in the debt ratio that was supposed to be at issue in this bill. In fact, in addition to not repealing those high-income tax cuts, the bill also cuts a large amount of funding from the IRS, and the IRS’s specifically — its functions to enforce the basic tax laws already on the books as they relate to the very wealthy. We have a very big situation in this country where hundreds of billions of dollars of owed taxes go unpaid by the richest Americans. That funding was supposed to be to do that kind of crackdown. Now it has been moved out into other programs. So, those are the big winners in this bill.

AMY GOODMAN: The losers?

DAVID SIROTA: Well, the losers are everybody else. The losers, in particular, very, very poor people. Again, as you discussed, the changes to the food stamp program, to make it harder for lots of people to access food stamps, at a time of an affordability crisis, that’s a big loss. I think student debtors, where, again, in the middle of an affordability crisis, you’ve got student debt payments that are going to start up again. So, basically, the working class of this country was deeply harmed by this bill.

And I would say this. The president celebrating this bill as a big win — in other words, instead of saying this is something that we had to do — and we can go over whether he actually had to do it. He didn’t have to do this. But instead of saying, “We had to do this. It’s kind of unfortunate,” going out and celebrating this as a big win is an admission about what the Democratic president and the Democratic Party see as a win, and for whom they think they want to secure such victories. It’s all now out on the table. It’s all now there for everybody to see.

And it’s important to remember that we didn’t have to be at this point. The Democratic Party controlled both houses of Congress in the lame duck and chose not to pass a clean debt ceiling bill. They chose not to. At the time, Senator Dick Durbin from Illinois simply said the party did not feel like making time at the end of the congressional session to do that.

So, the point being is this is exactly the result that the Democratic Party wanted. They wanted to work with Republicans to get to these exact policies. And now they are celebrating that. So I think we all need to take a moment to say, “OK, this is what the Democratic president and the Democratic Party, working alongside the Republican Party, this is what it actually wants.”

AMY GOODMAN: So, obviously, you agree that if the U.S. had defaulted, it would have created an absolute catastrophe. But you say, aside from even having negotiated the deal in the lame duck, when the Democrats were in control, that Biden had this option of the 14th Amendment and didn’t take it. Talk about the significance of that.

DAVID SIROTA: Sure. The Constitution makes pretty clear that the U.S. government is empowered, above statutes, if you will, to deal with the debt and make sure it does not default on its debt. Progressive lawmakers had asked the Biden administration to use this power to avert this entire manufactured crisis. And almost as soon as that proposal was floated by those lawmakers, the Biden White House said, no, they’re not even going to pursue it.

And again, I think you put that together with the fact that they didn’t try to pass a clean debt ceiling bill during the lame-duck session, when Democrats controlled the Congress, and what you see is a picture of a party that wanted this outcome. Overlay it, by the way, with one other layer, with the fact that Joe Biden, throughout his career, has given floor speeches on the floor of the Senate, has made clear that he wants to work with Republicans to cut spending, cut funding for social programs. So I think we have to step back and realize this is a moment of honesty, a moment of clarity, of where at least the leadership of the Democratic Party is when it comes to things like budget austerity.

AMY GOODMAN: Let me ask you about your piece on Republican presidential hopeful Ron DeSantis — right? — the Florida governor, headlined “Florida Lawmakers Help DeSantis Shovel More Cash To Wall Street,” in which you report how DeSantis’s fundraising for his 2024 presidential bid could be hindered by a federal pay-to-play rule that restricts campaign contributions from financial executives to state officials who control pension investment decisions. Explain.

DAVID SIROTA: Ron DeSantis, as the governor, is one of three people who control Florida’s massive public employee pension system. About 10, 15 years ago, an anti-corruption law was passed, in the wake of corruption scandals at pension systems, which said, basically, that the financial managers who are given money to manage by public officials, to manage those moneys on behalf of retirees, they cannot give money to politicians who control that money, because the decisions about who gets to invest those moneys need to be made based purely on merit, not on political influence.

As we report at The Lever — and folks can find at LeverNews.com — our story shows that DeSantis — under DeSantis, Florida pension money was moved to various financial firms whose executives were giving money to political groups that ultimately ended up boosting Ron DeSantis’s political campaigns. Now, there’s a question about whether they used intermediary groups to try to get around that very clear anti-corruption law.

But, moving forward, as DeSantis tries to raise money for his presidential campaign, this anti-corruption law is there to make sure that financial managers benefiting from his decisions and how he apportions the retirement funding for teachers, firefighters, other public employees, that that rule is there to try to make sure that he doesn’t use that leverage, he’s not able to use that leverage, to raise money from the financial firms that could get that money and earn big fees off that money. So, it could provide a very serious obstacle for DeSantis to raise lots of money, if the law — and it’s a big “if” — if that law is enforced.

AMY GOODMAN: You say this isn’t a theoretical problem. About a decade ago, New Jersey Governor Chris Christie, who’s running again, throwing his hat in the ring for president this week, as well as Texas Governor Rick Perry, both faced the same fundraising obstacle with their own GOP presidential campaigns. Quoting a Christie top adviser admitting, “There is no way around it. There are no loopholes.”

DAVID SIROTA: Yeah. Look, it’s a very, very clear law. And let’s be clear about how it works. It’s designed to deter the financial managers from giving the money, because the financial managers are the ones who can get punished. If you give money, if you’re a giant private equity firm and you give money to — your executives give money to Ron DeSantis, and the Florida pension fund is giving you money to manage, the law can basically say, “You can’t manage that money anymore.” So, it creates a financial deterrent to Wall Street firms to engage in that kind of financial fundraising for political candidates.

So, yes, it could be a huge obstacle for DeSantis. But again, I go back to the “if.” Will the Biden administration’s Securities and Exchange Commission actually enforce this law? Will the law actually be taken seriously by regulators? Will the law be applied to super PACs, some of which seem designed to get around these kinds of laws? That’s the big question for campaign finance here right now.

AMY GOODMAN: And finally, David Sirota, as many Republican presidential candidates throw their hat in the ring, from South Carolina’s Tim Scott, as well as Nikki Haley, to Chris Christie, to the North Carolina — to the North Dakota governor and, of course, DeSantis, if you can talk about — and Vice President Pence this week — what you’re watching?

DAVID SIROTA: Well, look, I think the Republican primary is going to be, essentially, an arms race for how extreme each candidate can try to position themselves. They’re going to be in a battle to show who’s more extreme on immigration, who’s more extreme on budget cutting, who’s more extreme on trying to push for larger Pentagon budgets and the like. So, I think watching that and seeing how extreme it gets is going to be important.

I also think, on the Democratic side, seeing whether the party is going to pursue an agenda which says, “We are a party that is going to deliver for the working class,” or whether the party is going to try to position itself in much the way you heard Joe Biden try to — starting to try to position himself, as a, quote-unquote, “bipartisan conciliator.”

My view is, is that the Democratic Party has a very, very serious risk in this election if it is not constantly showing that it is delivering for the working class, if it is trying to only show that it wants to work with Republicans, instead of saying, “Our agenda is to deliver real material gains for the working class.” If the party’s agenda is not that, if it is more of a bipartisan conciliation message, I think that puts at risk in a very real way the 2024 election.

AMY GOODMAN: David Sirota, award-winning investigative journalist and founder of the news website The Lever. We’ll link to your pieces, “This Is What Biden Says Is A ‘Big Win,’” as well as your piece on Ron DeSantis and Wall Street.

Coming up, we continue our conversation with a father who’s spent 20 years trying to hold the billionaire Sackler family accountable for its role in the opioid epidemic and the death of his 18-year-old son. Back in 30 seconds.