Our comrades in the United States published the following article as the US government once again entered deadlock over the debt ceiling. Within hours of its publication, Republican Speaker Kevin McCarthy came to a deal for a mere 45-day budget stopgap with the Democrats. Days later, in an unprecedented move, he was ousted thanks to a group of right-wing Republicans angry at the deal – a first in US history. These rollercoaster events show the turmoil wracking the regime in the US.
The ousting of Republican Speaker Kevin McCarthy is the first and only time in the 234-year history of the chamber that a speaker has been removed. After the briefest sigh of relief, the crisis on Capitol Hill has shifted into an even-higher gear.
The House was deadlocked over funding the federal government for the coming year, with a group of so-called hardline Republicans demanding tougher spending limits and a curtailing of further financial and military aid to Ukraine. The splits in the US ruling class are leading to ever-fiercer public clashes.
The short-term funding deal agreed by McCarthy did not include any more money for Ukraine, whilst otherwise agreeing to meet the Democrats’ federal spending plans. This exercise in kicking the can down the road passed, but enraged Republican hardliners, who swore to invoke a new clause whereby a single Congressperson can call a vote for the speaker’s removal at any time.
This measure was part of a 55-page litany of demands that allowed McCarthy to finally assume the post in January, after 15 ballots, as “one of the weakest speakers of the modern era” (to quote the Economist). When Florida’s Matt Gaetz tabled a “motion to vacate” on Tuesday, it passed by a vote of 216-210 with the support of eight Republicans.
Elections for a new speaker will not begin any earlier than next week, eating into the precious days remaining before McCarthy’s swansong deal expires. Given the tight margins in the House, the level of factional animosity within the Republicans, and the unpopularity of the options on offer, such a delay puts the risk of lockdown back on the agenda. Until a new speaker is elected, no further policy can be tabled, also precluding a further extension.
Even if the House of Representatives manages to agree on a successor in record time, and come to terms on a budget before the deadline in November, confidence in US capitalism, and the edifice of US democracy have already been severely undermined. There has been a sustained sell-off in government bonds, and another credit rating downgrade is possibly on the cards. Pew Research puts public trust in government at around 15 percent: a record low. Meanwhile, growing Republican opposition to supporting Ukraine reveals the extent to which the western alliance behind NATO’s inter-imperialist proxy war is crumbling.
The representatives of US Capital are busy tearing each other apart while the country tumbles towards a cliff.
With the first of October marking the end of the fiscal year on Capitol Hill, the US House of Representatives has only hours left to safeguard the interests of the capitalists they represent by passing a new federal budget. If they don’t, the US government will be forced to shut down, and untold economic mayhem could be unleashed on the world markets and national economy.
The current standoff is like déjà vu all over again from May of this year, when US public debt, ballooning from stimulus policies needed to keep the market afloat since 2020, reached more than $31.4 trillion. Anticipating disastrous consequences should they be unable to raise the debt ceiling, causing the government of the most dominant power on Earth to fail to pay its bills, the Republicans and Democrats “came together.”
The deal they passed in exchange for lifting the cap on the federal debt until 2025 made it more difficult for workers and their families to receive food stamps and other forms of government aid. The Biden administration also promised spending cuts for anything not related to the military—putting another nail in the coffin of long-promised student loan forgiveness—and featured the last-minute approval of a new gas pipeline, ensuring profits would continue to flow to the fossil fuel industry.
In other words, these fine representatives of the people horse-traded their way to an agreement that guaranteed bigger profits for the ruling class, with workers bearing the cost for current and future debt repayment. President Biden shamelessly described this as “an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone.” Now, four months and an additional $1.5 trillion in debt later, it seems that the only things which have grown are the deficit and dysfunction of the two ruling parties.
Even before the latest game of chicken, significant damage has been done to the US government’s credibility, when it saw its “AAA” creditworthiness rating downgraded to “AA+” by rating firm Fitch in August. This was due in large part to how Congress bungled and blustered its way through the debt limit crisis in May, and mirrors the measure taken by S&P’s ratings in 2011, when it made history for downgrading the federal government from AAA to AA+ for the first time in its history over another debt standoff that year.
Even if a deal is reached at the eleventh hour, the reputation of US treasury bonds has taken a hit and could result in a dip down to an “AA” rating for the first time ever. Fitch’s comments on the downgrade earlier this year reflected the pessimism the bourgeois feel about the country’s economic outlook generally, expressing anxiety over “the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.”
Republicans and Democrats have certainly done nothing to assuage these fears since August, careening towards a possible shutdown with eyes wide-open, still attempting to fake each other out.
The passage of the new budget requires these parties to again collaborate and agree on spending priorities. Typically, the song-and-dance of partisan posturing before pork-barrel style concessions are exchanged as part of a “compromise” brokered at the expense of working people would be done more expediently—without provoking the possibility of a government shutdown. However, as persistent inflation and tremors in the world economy continue to ramp up the pressure, the usual political tensions are accentuated, increasing the likelihood of an inoperable government failing to prevent its own closure.
This time, the fly in the ointment is not only that these parties are increasingly bitter in opposition to one another, but that they are suffering a crisis of “unity” within themselves, as an unedifying contest between reactionary grifters and “moderate” sycophants in the Republican Party is played out with the budget deadline as the backdrop for their political theater.
Republican leaders like the hapless House Speaker, Kevin McCarthy, are continually stymied by the likes of Matt Gaetz and other rabid Trumpists, who demand the deepest possible spending cuts to “combat inflation,” while publicly indicating a total lack of concern about a shutdown. Naturally, this has led to open hostility and exasperation within the party towards its Trump-ite wing, with “moderates” bemoaning the antics of the “clown show” and “dysfunction caucus.”
With alarm bells sounding throughout Capital Hill to broker a deal, the only recourse left to liberals is to urge their “friends” on the other side of the aisle to “do the right thing.” In times when economic pressure and political degeneracy prevail, the Democrats are a party well-practiced in goldbricking: flailing impotently and using chicanery to feign “progressivism,” while blaming “demagogues” for being unable to fulfill their meager promises.
With time for deliberation running out, a stopgap bill that kicks the deficit can further down the road appears to have failed as well, as the game of “who will blink first?” intensifies.
As we explained in May, while failure to make a deal cannot be ruled out, both parties, including the Trump-ites, are ultimately servants of capitalism, and will try to avoid anything which poses an existential threat to markets and secure profit-making. Whoever flinches, one thing is assured: they will try to make the working class pay. In the case of a shutdown, with the resulting shock from the reacting market could set off the dynamite that inflation and interest rate hikes have stuffed into the foundations of the US economy, sending ripples throughout the world and hurting workers the most.
Most immediately, wages and benefits would not be paid out to millions of government workers or their families. Hundreds of thousands of others would likely be compelled to continue working without receiving a paycheck.
Congress did have a chance after the last budget crisis to ensure funding would still go through for functions it considered “essential.” So far, federal contractors, national park employees, rank-and-file military service members, FEMA, and food stamps have not been deemed “essential.” But under Biden’s direction, the Pentagon has assured that military aid to Ukraine to the tune of $24 billion would still be paid out in the event of a shutdown!
While military families and SNAP recipients go hungry, US defense corporations like Raytheon, Lockheed Martin, and Northrop Grumman would continue to rake in profits, adding to their collective boost in net worth of over $76 billion since the US began funding the bloodshed in Ukraine.
Whether we face a shutdown or a last-minute deal made behind closed doors, we cannot accept this farce. The senility of capitalism is on full display as its political representatives play games with the livelihoods of working people the world over. Crucially, we should remember that the most recent government shutdown, when Trump was president, only ended when air traffic controllers started taking action and the leader of the flight attendants’ union started talking about a general strike. With organized labor gaining momentum through a series of high-profile strikes, might we see a repeat of 2018–19 on a higher level?
The International Marxist Tendency fights for a mass communist party armed with a program for socialist revolution, the creation of a workers’ state, and a democratically planned economy. Only this can put an end to the waste and bloat of capitalist government and the pretensions of its political agents, who haven’t the slightest idea how to run an efficient and harmonious society.