Debt ceiling talks: Republicans hold the cards – will they hold … or fold?

Debt ceiling talks: Republicans hold the cards – will they hold … or fold?

Debt ceiling talks: Republicans hold the cards – will they hold … or fold?

The debt ceiling deadline is one week away, and Americans have nothing to fear, according to a leading economist.


Dr. Dave Brat, the dean of Liberty University's School of Business, says there's more than enough money to make a necessary payment on interest owed.

"A default means you default on a U.S. Treasury bond. If we ever defaulted on the U.S. Treasury, we'd all be fishing under a bridge," Brat said Wednesday on Washington Watch with Tony Perkins. "It would be the end of Western Civilization."

Brat accused the Left and Janet Yellin, the Treasury secretary, of playing "word games."

"What she's talking about is paying all the bills for all Democratic spending," he explained. "That may not happen, and that's not a big deal. You just prioritize your spending in order."

A shutdown, should one occur, would disrupt non-essential services, but Social Security checks would still be mailed … and VA medical facilities and clinics would remain fully operational.

Brat, Dr. Dave (Liberty Univ) Brat

The key in the high-stakes game of chicken is that Republicans have the winning hand – as long they don't blink. Brat was asked if Republicans will hold the line.

"If they do not, they will cease to be a party. We're holding five aces. We've got four aces and a wild card. It's all you could ever hope for," Brat responded to show host Jody Hice.

A speed bump after alleged progress

Both sides had put out positive vibes on progress recently, but The White House said Wednesday that negotiations had hit a "speed bump." NBC News cited a Democratic official who accused House Speaker Kevin McCarthy of "bowing to MAGA extremists who want no compromise" while President Joe Biden has "negotiated in good faith."

But that's not the scene Epoch Times National Politics reporter Lawrence Wilson described Wednesday. Wilson, who appeared on Washington Watch along with Brat, told Hice that Biden's idea of meeting in the middle has McCarthy moving to the left edge of the discussion.

As House Republicans have explained repeatedly, they want to take spending back to the 2022 level

"McCarthy is frustrated, saying they won't give even a dollar, won't look to save even one dollar over 2023 spending in the 2024 fiscal year – and of the many things that are on the table, that seems to be the one that is the real sticking point on both sides," Wilson said.

Fierce resistance from the Democrats comes from reluctance to tarnish what they see as accomplishments by a president who can't gain the confidence of the American people. Wilson cited the Inflation Reduction Act, the Infrastructure Investment and Jobs Act, and the CHIPS and Science Act as programs the Democrats are defending.

"The Limit, Save, Grow Act, the Republican bill, would take back some of that money, so they want to avoid that," Wilson continued. "[Democrats] are also afraid that by reducing spending from the 2023 level back to the 2022 level that defense is going to stay the same, maybe increase, other things will increase.

"[But] social service programs that they say many Americans rely on, are where the cuts are going to have to come from – and they really don't want to see that. The Democrats have called that unreasonable and a non-starter, just unacceptable," Wilson added.

The speed bump appears to center on Medicaid and food benefits, where Republicans want to see that those who are able to work do so more for their benefits.

Democrats want no change to food, medical benefits

According to the political reporter, Democrats don't want to see any changes in those areas at all.

"What Republicans are proposing is to increase the age range for that by about five years for people who are able-bodied and not parents; that is, not caring for children at home … and Democrats say that's just too much," Wilson said. "They don't want to see anybody thrown off of SNAP benefits or any other restrictions applied to those two programs. That's the one [area] that seems to be a real sticking point, besides the overall spending limit."

Brat reiterated that the Biden administration is playing with words and making it harder to follow what's really going on – and coverage from traditional media outlets doesn't help, he offered.

"Treasury Secretary Janet Yellen (right) sends her memos to Congress, again misleading language. She's aiming at the House. The Senate hasn't done its homework. They have no numbers, no receipts, they don't have a budget plan," Brat said. And that, he added, puts Republicans in the driver's seat in terms of negotiations.

According to figures from the Congressional Budget Office, the U.S. is on pace to hand off a $50 trillion debt to the next generation.

"That's $2.5 trillion a year just in interest payments. You don't get anything for that. That's three times the military budget right now," Brat pointed out. "That's the second piece you'll never here from the mainstream media: the baseline argument."

Wilson and Brat both expect additional posturing before the deadline with some agreement eventually reached. "The question is, will it pass both the House and the Senate, whatever the two leaders come up with?" Wilson asked.

"We're only saving $4 trillion out of $50 trillion in debt. Our team passed a bill, the Senate has not. Everything is on our side. Biden said I'm not going to negotiate, I don't care, and thumbed his nose at the whole thing. We need to hold strong. It's time to take care of the American people and the kids," Brat concluded.