LETTER FROM AN AMERICAN 5.31.2023 CURRENT BUGET NEGOTIATIONS "SUCH A GOOD DEAL?" "[O]ne of the things that I hear some of you guys saying is, 'Why doesn't Biden say what a good deal it is?'"President Joe Biden said to reporters yesterday afternoon before leaving the White House on the Marine One helicopter. "Why would Biden say what a good deal it is before the vote? You think that's going to help me get it passed? No. That's why you guys don't bargain very well." Biden's unusually revealing comment about the budget negotiations was actually a statement about his presidency. Unlike his Republican opponents, he has refused to try to win points by playing the media and instead has worked behind the scenes to govern, sometimes staying out of negotiations, sometimes being central to them. The result has been, as Daily Beast columnist David Rothkopf summarized today, historic. Biden has worked to replace 40 years of supply-side economics with policies to rebuild the nation's economy and infrastructure by supporting ordinary Americans. The American Rescue Plan gave the United States a faster economic recovery from the COVID pandemic than any other major economy. The Bipartisan Infrastructure Law has already funded more than 32,000 projects in more than 4,500 communities in all 50 states, Washington D.C., and U.S. territories. The Inflation Reduction Act made the biggest investment in addressing climate change in our history, and according to University of Washington transportation analyst Jack Conness, it and the CHIPS and Science Act have already attracted over $220 billion in private investment, much of it going to Republican-dominated states: Tennessee, Nevada, North Carolina, and Oklahoma have each attracted more than $4 billion; Ohio, more than $6 billion; Arizona, more than $7 billion; South Carolina, more than $9 billion; and Georgia, more than $13 billion. Victoria Guida in Politico yesterday reported that the reordering of the economy under Biden and the Democrats has reversed the widening income gap between wage workers and upper-income professionals that has been growing for the past 40 years. The pay of those making an average of $12.50 an hour grew by almost 6 percent from 2020 to 2022, even after inflation. Those gains are now at risk as pandemic measures end and the Fed raises interest rates to bring down inflation, although the wage increases are only a piece of the inflation puzzle: Talmon Joseph Smith and Joe Rennison of the New York Times today reported that companies raising their prices to "protect...profits" are "adding to inflation." In other words, companies pushed prices beyond normal profit margins during the pandemic and the economic recovery, then maintained those higher profit margins with the Russian invasion of Ukraine, and continue to maintain them now. The fight over the debt ceiling is both an example of the different approaches to negotiation on the part of Biden and Republicans like House speaker Kevin McCarthy (R-CA), and part of the larger question about the direction of the country. On January 13, 2023, Treasury Secretary Janet Yellen warned McCarthy that the Treasury was about to hit the borrowing limit established by Congress and that she would have to resort to extraordinary measures in order to meet obligations until Congress raised the debt ceiling. On March 9, as part of the usual budget process, Biden produced a detailed budget, which was a wish list of programs that would continue to build the country from the bottom up. He told McCarthy he would meet with the speaker as soon as he produced his own budget, which McCarthy could not do because the far-right House Freedom Caucus (these days being abbreviated as HFC) wanted extreme cuts to which other Republicans would never agree. On April 26 the House Republicans passed a bill that would require $4.8 trillion in cuts but was quite vague about how it would do so apart from getting rid of much of the legislation the Democrats had just passed. HFC members said they would not raise the debt ceiling until the Senate passed their bill. That is, they would drive the United States into default, crashing the U.S. and the global economy, until the president and the Democrats agreed to their policies. Even then, they would raise it only until next spring, with the expectation that it would then become a key factor in the 2024 election. Biden insisted all along that he would not negotiate over the debt ceiling, which pays for money already appropriated under the normal process of Congress and which Congress raised three times under former president Trump even as he added $7.8 trillion to the national debt. Biden said he would happily negotiate over the budget. McCarthy, meanwhile, was out in front of the cameras and on social media insulting Biden and insisting that it was Biden's fault that talks took so long to get started. Late Saturday, the two sides announced an agreement "in principle" to raise the debt ceiling for two years -- clearing the presidential election. As the Washington Post's Catherine Rampell noted, it protects current spending on Social Security, Medicare, and Medicaid; keeps tax rates as they are; increases spending on defense and veterans' programs; leaves most other domestic spending the same; cuts a little from the expanded funding of the Internal Revenue Service; and tweaks both the permitting process for energy projects and the existing work requirements in the food assistance program. As Rampell points out, "this much-ballyhooed 'deal' doesn't seem terribly different from whatever budget agreement would have materialized anyway later this year, during the usual annual appropriations process, under divided government. To President Biden's credit, the most objectionable ransoms that Republicans had been demanding are all gone." Now the measure has to get through both parties, with congressmembers back in Washington today after the holiday weekend. Freedom Caucus members are howling at the deal. Representative Chip Roy (R-TX) is threatening to bottle the measure up in the House Rules Committee, which decides what bills make it to the floor. The Freedom Caucus forced McCarthy to stack that committee with far-right extremists as part of his deal for the speakership (it has nine Republicans but only four Democrats on it). But Josh Marshall of Talking Points Memo suggests that McCarthy’s alliancewith Representatives Jim Jordan (R-OH) and Marjorie Taylor Greene (R-GA) might pay off here, since the two have thrown their weight behind the measure. <>Even if the measure does pass before the June 5 deadline when the Treasury runs out of money, it has had an important effect. As Rampell noted, it has weakened the United States. It has enabled both China and Russia to portray the U.S. as unstable and an unreliable partner. As if to prove that criticism, Biden had to cancel a trip to Australia and Papua New Guinea, where he was strengthening the Indo-Pacific alliances designed to weaken Chinese dominance of the region. (And Russia continues to involve itself in U.S. politics: today Tara Reade, the woman who in 2020 accused Biden of sexually assaulting her, appeared on Russian television next to alleged spy Maria Butina to say she has fled to Russia out of fear for her life in the U.S.) Writing in Foreign Policy, Howard W. French sees a more sweeping problem with the debt ceiling fight: it "highlights America's warped priorities." "[W]hen a rich and powerful country finds it easier to cut back on the way that it invests in its people, in education, in science, and in making sure that the weakest among them are not completely left behind than to curtail useless and profligate weapons spending," he said, "there are reasons to worry about the foundations of its power."