Dear Fellow Marylanders,
I have been having déjà vu for weeks, actually months, anytime I think about the economy. Similar to the fiscal crisis of 2011, Republican lawmakers allowed our country to step precariously close to the cliff’s edge as the U.S. Treasury used what are called extraordinary measures to keep paying bills and maintain the “full faith and credit” of the United States of America.
For six months, Treasury Secretary Janet Yellen has been doing everything she can to ensure that our veterans, seniors and other vulnerable Americans could continue to receive payments on time, along with state and local governments that rely on federal payments to repair bridges and water lines or maintain public safety. As the Senate finally voted to suspend the debt limit cap late Thursday, we were just four days away from an unprecedented default.
Getting that close was irresponsible in 2011. Even without default, Standard & Poor’s downgraded our country’s credit rating. As a result, even without default, markets fell and the cost to borrow money went up by $1.3 billion because of the greater risk.
Fortunately, the compromise legislation negotiated by the White House and the Speaker of the House this week passed the House of Representatives by an overwhelming and bipartisan margin of 314-177, and passed the Senate by a 63-36 vote. It was good to see Democrats and Republicans come together for a common purpose. We need to do this more frequently as we tackle other challenges facing our nation.
I voted for the Fiscal Responsibility Act of 2023 in order to prevent a catastrophic and unprecedented default on the full faith and credit of the United States. The package we passed allows the government to pay its bills – spending that was previously debated and appropriated by Congress, as opposed to new spending. We must never jeopardize our economy and our credit by refusing to pay our bills. The Constitution clearly states that “the validity of the public debt of the United States, authorized by law…shall not be questioned.”
The legislation about to be law represents a compromise in divided government. While I would have written the bill differently, I think it was negotiated in good faith and it rejects the House of Representatives’ earlier proposal for drastic cuts in critical programs and investments.
In addition, this legislation takes the debt limit off the table until after the 2024 Presidential election, so it can no longer be used as a political weapon during this Congress.
When Congress approves spending money on something, anything, we need to pay those bills. The time to debate the benefits or concerns with spending is at the time we are considering the spending, not when it is time to pay the tab.
This compromise agreement is important for our economy, which has created some of the lowest unemployment in 50 years and a boom in small business creation. The agreement also protects the historic accomplishments of the last Congress and the Biden-Harris administration. Bipartisan measures remain intact, such as the Infrastructure Investment and Jobs Act to repair our crumbling infrastructure, the CHIPS and Science Act to spur America’s innovation and competitiveness globally, and the PACT Act to do right by our injured veterans. The Fiscal Responsibility Act of 2023 also protects the historic investments made in the Inflation Reduction Act to combat climate change, promote clean energy, make companies pay their fair share, and help alleviate the high costs of prescription drugs.
We have avoided the worst consequences of default – just barely – but there is more work to be done. Congress must now turn to the difficult and important task of funding our government for the upcoming 2024 fiscal year, using the regular order envisioned by this budget agreement and our appropriations process. We also must pass legislation so that the full faith and credit of the United States is never held hostage to partisan fights again. Congress needs to permanently take this off the table and eliminate the debt ceiling.
For now, I will breathe a sigh of relief that we avoided a financial catastrophe. But we cannot keep getting this close to disaster. Partisan brinksmanship comes at a cost and for those who were willing to take the entire country and global economy with them over a fiscal cliff, I urge them to think carefully before setting up a doomsday scenario in the future.
Thank you for your time. Please feel free to reply to this email with your thoughts on this issue or any other. I appreciate all the comments we receive.