But that doesn’t mean this issue is going away for Trump — a battle is looming for the next time the debt ceiling comes around. By then, it will be clear that Trump’s unrealistic growth expectations, coupled with plans for tax cuts and more infrastructure and defense spending, will actually balloon the deficit and debt. In that scenario, the fiscal hawks in the Republican Party will not stand by silently. The House Freedom Caucus, a group of about 30-40 fiscally conservative representatives, has enough voting strength to deny a House majority based on party lines for raising the debt limit.
This internal fight might force Trump to cut back on some of his spending initiatives. Also, while he has so far insisted that he does not want to cut Social Security and Medicare, he might have to reform them down the road in order to stave off an intraparty clash. Without addressing the two biggest sources of government spending, another debt ceiling standoff is brewing — with all the attendant consequences for the U.S. and global economies.