Kevin McCarthy’s Idea of Austerity: $115 Billion for Tax Cheats and Oil Companies

The debt limit bill would also claw back $71 billion of the $80 billion Congress included in last year’s climate bill to boost funding for the IRS. That sounds like a spending cut, but rescinding that increase would cost the federal government $186 billion in lost tax revenue over the next decade, according to CBO, netting out to a cost of $115 billion.

You may protest that the previous two calculations are speculation. If the debt ceiling bill’s pledge to cut discretionary spending next year by 27 or 33 percent is a bluff, isn’t that same bill’s pledge to bloat the deficit by $115.4 billion also a bluff? Sure, OK. But congressional Republicans say they’re fighting Biden on the debt ceiling (“We owe it to our children”) because they want to halt runaway spending. That renders glaringly hypocritical individual examples where they propose spending increases. We do not “owe it to our children” to charge oil companies less for leases on federal land or to enable tax cheating by the rich.

Even setting aside McCarthy’s debt ceiling bill, don’t kid yourself that Republican intransigence on the debt ceiling is cost-free. The statutory debt ceiling of $31.4 trillion was actually reached way back on January 19. The only reason the United States didn’t go into default then was that the Treasury used the same “extraordinary measures” (i.e., accounting gimmicks) that it deployed during similarly dangerous debt limit games of chicken that congressional Republicans chose to play in 2011 and 2013. Republicans like to point out that congressional Democrats have used the debt limit to extract concessions from Republican presidents. That’s true. But only Republicans resort to full-on extortion that puts the country at serious risk of default. In 2011, when the GOP played a similar game, it managed to lower Standard & Poor’s credit rating for U.S. Treasury bills.